Delaware announces a settlement is reached with 30 other states, ending the outstanding damages phase of an unclaimed property dispute.
In 2023, the U.S. Supreme Court ruled against Delaware in an unclaimed property case, declaring Delaware does not have the right to collect unclaimed checks issued by the cash-transfer company MoneyGram.
While Delaware collected checks on the grounds that the company is incorporated in the state, the court determined the checks fall under a decades-old federal law that returns unclaimed money orders to the states where they were purchased.
Under the settlement, Delaware owes 30 states over $102 million of the property that MoneyGram reported to Delaware from 2011 to 2017, which represents roughly half of the report years disputed in the litigation.
Additionally, roughly $89 million deposited by MoneyGram in a litigation escrow account from 2018 to 2022, plus interest earned, will be distributed among all 50 states based on each instrument’s place of purchase. The 30 states involved in the lawsuit will receive nearly $55 million, plus earned interest, from the escrow account.
Director of the Office of Unclaimed Property Brenda Mayrack says she is happy the settlement brings the litigation to a close and hopes it informs how states tackle unclaimed property disputes in the future.
“It allows us to move past this litigation that's been going on almost 10 years. At this point, we hope that it means we can really increase our efforts to work together with other states and how we return property to owners and increase holder compliance," Mayrack said.
In fiscal year 2016, the abandoned property program made up nearly 15% of the general fund budget — now, due to the increase in state spending, the program only accounts for roughly 6% of the budget.
The abandoned property program is capped at bringing in $554 million for the state's operating budget.
“I think the [financial] impact is negligible. And again, because the Supreme Court's decision in February of 2023 was limited and otherwise did not alter the fundamental rules that determine where unclaimed property is reporting, I think the long-term impact on Delaware's finances is also minimal.”
Mayrack expects the $102 million payout to be distributed to the states by the end of the calendar year.
