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Incoming from Delaware: Unclaimed Property VDA Program invitation notices have been sent out

The Delaware Office of the Secretary of State (SOS) confirmed that on April 10, 2026, invitation notices were sent to businesses (holders) identified as potentially out of compliance with Delaware’s unclaimed property law. The notices encourage holders to enroll in the SOS Unclaimed Property Voluntary Disclosure Agreement (VDA) Program within 90 days of receipt of the notice and cautions that failure to do so will result in the holder being referred to a peer state agency (the Department of Finance) for examination – the day-to-day of which is conducted by one of Delaware’s third-party unclaimed property audit firms. As a result, these seemingly routine initial regulatory compliance notices should not be ignored, and it is critical that companies be on the lookout for these notices and respond in a timely manner.

VDA Program invitations are typically sent to the holder’s chief financial officer (CFO) via certified mail. Given the history of these notices being lost, delayed in the mailroom, or forwarded to the wrong department, it may be prudent for those responsible for unclaimed property compliance to check with their CFO in the coming weeks on whether a letter from the SOS was received since the 90-day clock is imminent. Recipients of these invitations range from middle-market companies to Fortune 100 companies, both privately and publicly held, across a wide range of industries, including oil and gas, retail, banking, utilities, technology, media, healthcare, manufacturing, pharmaceutical, and consumer products. However, there has recently been a noticeable increase in invitations sent to companies that maintain a long filing history but may have been involved in recent merger or acquisition activity. Additionally, companies that have formed within the last 10 years but have experienced rapid growth over the last few years are at higher risk of receiving invitations. This group includes startups that have recently gone public; cloud and artificial intelligence companies; and companies with online and transient customer bases, such as payment processers and online marketplaces. Delaware incorporated entities with a large presence of foreign owned (or unknown) property on their books and records are always at risk of an unclaimed property regulatory compliance review by Delaware.

The lookback period for both the unclaimed property audits and the VDA Program is 10 report years, plus the five-year dormancy period for most property types, equating to a 15-year lookback period. Often, complete and researchable books and records are not available for the full lookback period and the VDA Program regulations require estimation for the older periods.

Enrolling in the VDA Program offers several benefits, including, but not limited to, a waiver of Delaware’s statutory penalties, a significant reduction in interest paid on any findings, control over the process, a 90-day aging criteria for voided disbursement checks that limits the workload (compared to the traditional 30-day period), and not being referred to the Department of Finance – which has the potential to turn into a multistate audit.

Holders that receive an invitation to the VDA Program from the SOS in the coming weeks are [...]

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Meaningful Statute of Limitations for Unclaimed Property Audits and Enforcement Actions? Michigan Court of Appeals Says Yes!

On January 19, 2023, the Michigan Court of Appeals affirmed two 2022 trial court orders, holding that initiating an unclaimed property audit does not toll (or freeze) the running of the statute of limitations (time-bar) for the Michigan State Treasurer to commence “an action or proceeding” with respect to a duty of a holder.[1] As most holders are well aware, unclaimed property audits are extremely invasive and burdensome and, unlike other types of audits conducted by states, often drag on for a decade or more before the state will issue a formal notice and demand—covering multiple years and looking back from the date of the original audit notice (often 10 or 15 years). This dynamic has created an audit framework that sets holders up for failure (really, who has complete books and records that far back?) and results in millions of unclaimed property being reported to states because of record limitations alone and third-party audit firms being handsomely paid for their time spent.

The Michigan Court of Appeals’ decision calls this entire model (some would say scheme) into question and could drastically change how holder audits look, feel and proceed in the unclaimed property world going forward. Even more importantly for holders currently under audit, these decisions could drastically narrow the scope of the open periods covered by the audit for Michigan and other states with similar unclaimed property statute of limitations.

Practice Note: While the common sense holding in this case is well established in the tax realm, it has long been the position of unclaimed property administrators and their third-party audit firms that the commencement of an audit alone freezes the statute of limitations and allows them to enforce the duties of holders looking back from that date. This (now precedential) Michigan Court of Appeals decision flies in the face of that long-standing view and calls into question whether peer states with similar unclaimed property statute of limitations are barred from enforcing transaction years being reviewed under pending audits. Because the Michigan unclaimed property statute of limitations is modeled off a provision contained in the 1981 Uniform Unclaimed Property Act (which has been adopted by many states and incorporated in the Revised Uniform Unclaimed Property Act approved in 2016), this is not a Michigan-specific victory and one that should be explored further for holders under audit by other states as well. Showing the nationwide importance of these Michigan cases, the National Association of State Treasurers filed an amicus brief through its affiliate, the National Association of Unclaimed Property Administrators, with the Michigan Court of Appeals in July 2022; however, their arguments were not enough to convince the Court to modify the trial court decision interpreting the plain language of the statute of limitations and uphold the trial court ruling in favor of the holders.

The State Treasurer filed an application for leave to appeal the Michigan Court of Appeals opinion to the Michigan Supreme Court (the state court of last resort, which has [...]

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