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The Area

All unclaimed property is potentially subject to unclaimed property or escheat laws. These laws can apply to many types of property, from uncashed payroll, vendor, and dividend checks to gift card balances. The holder of the unclaimed property is required to remit it to the rightful owner’s last known address. Each state applies different and sometimes conflicting rules about which state is entitled to which type of property and after how long a period of dormancy. Companies often fail to turn this property over in a timely manner.

The Risks

States frequently use third party audit firms, compensated on a contingent fee basis, to run unclaimed property audits. The audits can go back over thirty years. Often no statute of limitations applies even if a company has been remitting unclaimed property and filing returns. Confronted with these extensive audits, it can be difficult to locate records and determine which state is even entitled to the unclaimed property. 

Our Value Add

We have represented companies in multi-million dollar audits in many states and have experience working with third party auditors and with accounting and data mining experts that we engage for our clients.

In particular, we often assist our clients to develop prospective compliance strategies and negotiate settlements through voluntary disclosure agreements or amnesties. We also help in dealing with third party auditors by negotiating "non-disclosure agreements" that serve as proxies to limit the scope of audits and to keep certain property out of an audit because the states are simply not entitled to it. Although we strive to achieve a favorable settlement for our clients, we have the resources and experience to successfully litigate these matters when necessary.

View More

Litigation Forecast 2015: What Corporate Counsel Need to Know for the Coming Year (January 2015). Contributor.
"Unclaimed Property: Days May Be Numbered for Abusive Estimation Techniques," Regulatory Alert (June 6, 2014).
Client Alert/Newsletter

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