For those holding their proverbial breath that the proposed regulations required by Delaware's SB 13, pertaining to the State’s estimation methodology, would consider the pitfalls clearly delineated by Judge Sleet in Temple-Inland, it’s time to exhale.
Delaware's proposed regulations indicate that the State is either (1) tone deaf to Judge Sleet's assessment that Delaware's past practices, including its estimation methodology, "shocked the conscience"; or that (2) the State is more than willing to face the risk of additional adverse Federal court decisions, which could be realized if the regulations are finalized as currently proposed.
Comments to the proposed regulations must be submitted on or before May 3, 2017.
We anticipate a robust public comment period and await the impact, if any, that such comments will have on the final regulations.
Despite its failure to amend or revise the current estimation methodology, there are a few nuggets embedded in the proposed regulations that would benefit a Holder's position in estimating a liability. One such benefit proposes to allow a Holder to remove from estimation any obligation that was satisfactorily returned to the owner, even if such satisfaction occurred during the course of the audit.
For additional questions on the proposed regulations or how Holders under audit or considering entering into a Delaware (or other State) Voluntary Disclosure Programs should proceed, contact Duff & Phelps' unclaimed property professionals.