Delaware settles unclaimed property lawsuit

 

DOVER — Delaware has settled with a company suing it over its abandoned property laws.

In a Friday filing with the U.S. District Court for the District of Delaware, the state and Temple-Inland jointly requested Judge Gregory Sleet dismiss a lawsuit that argued Delaware’s method of estimating abandoned property values was unfair and illegal.

“In support of this motion, the parties state that they have entered into a voluntary settlement agreement that fully and finally resolves all claims, including all claims that were asserted, or that could have been asserted, in the case and therefore the matters in dispute between plaintiff and defendants have been resolved,” wrote Temple-Inland and Delaware officials.

Temple-Inland’s lawsuit had argued the sum the state said the company owed was much too high.

Judge Sleet in June issued a ruling harshly criticizing the state for its “lax enforcement of its unclaimed property laws.”

Delaware officials waited more than two decades to audit Temple-Inland, failed to inform the company it should retain records for the audit, used a biased method of estimation and took advantage of “loopholes,” the judge said in his ruling.

“To put the matter gently, defendants have engaged in a game of ‘gotcha’ that shocks the conscience,” he wrote.

Unclaimed property brings in hundreds of millions for Delaware annually because of its status as a leading incorporation site. It is facing lawsuits from more than 20 other states over its accounting practices.

The Department of Finance could not be immediately reached for comment Saturday.

Reach staff writer Matt Bittle at mbittle@newszap.com

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