The Delaware General Assembly has introduced two bills aimed at refining the state’s unclaimed property laws in response to significant and pressing issues. Senate Bill 266 seeks to enhance the role of the state escheator in managing whistleblower activities, including offering incentives and imposing penalties on noncompliant holders. Senate Bill 267 focuses on defining terms related to foreign property, worthless securities, and provisions for early reporting.
Senate Bill 266 This bill proposes to eliminate the ability of individuals (“whistleblowers”) to initiate actions under the Delaware False Claims and Reporting Act (DFCRA) for non-compliance with the reporting obligations of the Delaware Unclaimed Property Law (UPL). Instead, it allows the attorney general to take action after a 90-day period, during which the state escheator may begin an examination of a holder not currently involved in a voluntary disclosure agreement or under any ongoing review. Additionally, the bill specifies potential rewards for whistleblowers who provide valuable information about a holder’s failure to meet the reporting requirements of the UPL, resulting in a payment to the state.
Under the proposed changes, if a whistleblower submits information concerning a holder’s noncompliance, the state escheator has up to 90 days to initiate an examination. Alternatively, based on the whistleblower’s information, the attorney general may settle a claim and determine the whistleblower's reward from the total payments made by the holder to the state:
A minimum of 20% to a maximum of 30% of the first $5 million.
A minimum of 10% to a maximum of 20% of any sum over $5 million.
Any agreed-upon costs, including attorney's fees.
This adjustment contrasts with the previous DFCRA provisions, where whistleblowers could receive 15–25% of the recovery if the state intervened in a lawsuit, and 25–30% if the state did not.
Senate Bill 267 This bill provides clarifications on various aspects of the state’s unclaimed property laws:
Section 4 restricts the filing of amended reports by holders seeking a refund on property claims that have been filed and paid, or when the original report was filed in connection with an examination or voluntary disclosure agreement, or after three years due to errors in the cost of goods sold calculation related to gift card reporting.
Section 6 reaffirms that holders must pay and deliver property simultaneously with their report filing.
Section 7 introduces measures to allow the state to pursue unclaimed property claims in bankruptcy situations.
Section 8 details the state’s indemnification duties, defines good faith practices, and allows the state escheator to enter into written indemnification agreements with holders seeking early property reporting.
Section 9 confirms the state escheator’s discretion to refuse custody of physical assets, including savings and bearer bonds, properties posing litigation risks, worthless securities, and virtual currencies lacking a stable market.
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