Del. sued by 21 states over unclaimed money

In a lawsuit filed directly to the U.S. Supreme Court, 21 states argue Delaware is wrongly hanging on to at least 150 million dollars in uncashed checks.

Arkansas and Texas are leading the case.

“The bottom line is simple,” says Texas Attorney General Ken Paxton. “Delaware is ignoring controlling federal law in exchange for financial gain. They have hundreds of millions of dollars that rightfully belongs to the taxpayers of our states.”

At the center of the issue are checks that have to be paid in advance, like a money order. For example, if a Texas resident gets a money order through their Delaware-incorporated bank but the recipient of the order never cashes it, that value is considered unclaimed funds.

Attorney General Paxton claims Delaware has been keeping those uncashed checks and alleges this is a violation of the Federal Dispositions Act.

“A couple of years ago, the state of Delaware elected to begin playing by a different set of rules,” he says. “Delaware decided that financial institutions incorporated in Delaware should send the proceeds of all unclaimed official checks to Delaware, no matter where they were purchased.”

Delaware Secretary of Finance Thomas Cook admits the issue has been the subject of two prior lawsuits filed by Pennsylvania and Wisconsin; however, the state has disputed the allegations.

Cook says an action has been filed to the U.S. Supreme Court to resolve it.

In a statement sent to 47ABC, he says “Delaware cannot speculate why Texas did not intervene in the existing Supreme Court case, but is hopeful that the Supreme Court will provide all states with guidance on how companies should handle this particular type of unclaimed property in the future.”

The other states that joined the suit are Alabama, Arizona, Colorado, Florida, Idaho, Indiana, Kansas, Kentucky, Louisiana, Michigan, Montana, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, South Carolina, Utah and West Virginia.