Subchapter IV. Other Unclaimed Property
TITLE 12
Decedents' Estates and Fiduciary Relations
Descent and Distribution; Escheat
CHAPTER 11. ESCHEATS
Subchapter IV. Other Unclaimed Property
§ 1197. Other property escheated.
Except as otherwise provided elsewhere in the Delaware Code all property, as hereinafter defined and not otherwise subject to escheat in accordance with this chapter, the title to which has failed and the power of alienation suspended by reason of: (1) The death of the owner thereof, intestate, leaving no known heirs-at-law; (2) the owner thereof having disappeared or being missing from the owner's last known place of residence for a continuous period of 5 years or more, leaving no known heirs-at-law; or (3) the same having been abandoned by the owner thereof, as hereinafter defined, shall descend to the State as an escheat in accordance with the Constitution, the general laws of this State or this subchapter.
12 Del. C. 1953, § 1197; 58 Del. Laws, c. 275, § 1; 63 Del. Laws, c. 299, § 1; 66 Del. Laws, c. 379, § 5; 70 Del. Laws, c. 186, § 1.;
§ 1198. Definitions.
For purposes of this subchapter, the following definitions shall apply:
(1) "Abandoned property" means property against which a full period of dormancy has run.
(2) "Appropriation" means the act of the State, through its duly constituted officers or agencies, in taking or accepting possession or custody of abandoned, unprotected, unclaimed or lost property as conservator thereof for later disposition by descent to the State as an escheat or redemption by the owner as provided in this subchapter.
(3) "Distributions held by financial intermediaries for unknown owners" means property as generally defined in paragraph (11) of this section, which consists of dividends, interest, stock and other distributions made by issuers of securities which are held by financial intermediaries (including, by way of example and not limitation, banks, transfer agents, brokers and other depositories) for beneficial owners whose identities are unknown.
(4) "Escheat" means the descent or devolution of property to the State under and by virtue of the Constitution of the State, the general laws of this State or this subchapter.
(5) "Escheatable property" means property which is subject to escheat to the State under and by virtue of the Constitution of the State, the general laws of this State or this subchapter.
(6) "Escheated property" means property which has descended to the State as an escheat.
(7) "Holder" means any person having possession, custody or control of the property of another person and includes a post office, a depository, a bailee, a trustee, a receiver or other liquidating officer, a fiduciary, a governmental department, institution or agency, a municipal corporation and the fiscal officers thereof, a public utility, service corporation and every other legal entity incorporated or created under the laws of this State or doing business in this State. For purposes of this subchapter, the issuer of any intangible ownership interest in a corporation, whether or not represented by a stock certificate, which is registered on stock transfer or other like books of the issuer or its agent, shall be deemed a holder of such property. This definition shall be construed as distinguishing the term "holder" of property from the term "owner" of property as hereinbefore defined and as excluding from the term "holder" any person holding or possessing property by virtue of title or ownership.
(8) "Owner," in addition to its commonly accepted meaning, shall be construed to particularly mean and include any person, as hereinbefore defined, having the legal or equitable title to property coming within the purview of this subchapter.
(9)a. "Period of dormancy" means the full and continuous period of 5 years, except a period of 15 years for traveler's checks, during which an owner has ceased, failed or neglected to exercise dominion or control over property or to assert a right of ownership or possession or to make presentment and demand for payment and satisfaction or to do any other act in relation to or concerning such property. Notwithstanding the foregoing, "period of dormancy" means the full and continuous period of 3 years with respect to intangible ownership or indebtedness in a corporation or other entity whether or not represented by a stock certificate or other certificate of membership, bonds and other securities including fractional shares, interest, dividends, cash, coupon interest, liquidation value of stocks and bonds, funds to redeem stocks and bonds, and distributions held by financial intermediaries.
b. A full period of dormancy shall be deemed to have run with respect to any dividends or other distributions held for or owing to an owner at the time a period of dormancy shall have run with respect to the intangible ownership interest in a corporation partnership, statutory or common law trust, limited liability company, or other entity to which such dividend or other distribution attaches. For good cause shown, and upon notice to the State Escheator, the Court of Chancery may, with respect to property over which the court has otherwise assumed jurisdiction, extend the period of dormancy to a specific date by which an owner may exercise a right, make a demand or file a claim, provided each extension is set forth in a separate order of the court referring specifically to this section, and each extension is no longer than 3 years, provided further there shall be no more than 2 extensions under this subsection. Except as provided in § 1210 of this title, the period of dormancy shall not commence to run with respect to which claims, demands or other property held by a holder pursuant to a written agreement which contemplates that there shall be a specific period of inactivity, until the expiration of the contemplated period of inactivity. This definition shall be construed as excluding any act or doing of a holder of abandoned property not done at the express request or authorization of the owner. Notwithstanding the foregoing, the "period of dormancy" with regard to gift certificates shall be the shorter of:
1. 5 years, or
2. The expiration period, if any, of the gift certificate less 1 day. In the event the period of dormancy is determined by reference to the expiration period of the gift certificate, the rights of the Escheator shall attach at the time provided in this paragraph (9)b.2. of this section, but the issuer may continue to hold the property and may report and pay over such property as if the period of dormancy were 5 years.
A full period of dormancy shall be deemed to have run with respect to any property that is otherwise reportable and payable to this State that a holder in accordance with the laws of the jurisdiction wherein the holder is located, is obligated or required to report and pay over such property to the other jurisdiction because of a shorter period of dormancy or reporting period.
c. Notwithstanding the foregoing, "period of dormancy" means the full and continuous period of 1 year following the last day of the meet with respect to sums held for the payment of outstanding pari-mutuel tickets from the meet.
(10) "Person" includes a natural person, a corporation organized or created under the laws of this State or a corporation doing business or which has been engaged in business in this State, a copartnership, a voluntary association and every or any other association or organization of individuals, but excludes banking organizations and any life insurance company.
(11) "Property" means personal property, including "distributions held by financial intermediaries for unknown owners" as that phrase is defined in paragraph (3) of this section, of every kind or description, tangible or intangible, in the possession or under the control of a holder, as hereinafter defined, and includes, but not by way of limitation, (i) money; (ii) bills of exchange; (iii) intangible ownership interests in corporations, whether or not represented by a stock certificate, bonds and other securities; (iv) credits, including wages and other allowances for services earned or accrued on or after January 1, 1958, money orders and traveler's checks, also amounts received in consideration for gift certificates which are unredeemed, or, in lieu of which the State Escheator may in the Escheator's discretion and upon the specific request of the issuer, accept: (1) Gift certificates reissued at face value on the date on which they are tendered to the Escheator; or (2) where the gift certificates provide that they are redeemable for merchandise only, an amount in money representing the maximum cost to the issuer of merchandise represented by the certificate. The burden of proof as to the cost of merchandise shall be on the issuer of the certificate; (v) dividends, cash or stock; (vi) certificates of membership in a corporation or association; (vii) security deposits; (viii) funds deposited by holder with fiscal agents of fiduciaries for payment to owner of dividends, coupon interest and liquidation value of stocks and bonds; (ix) funds to redeem stocks and bonds; (x) amounts refundable from excess or increased rates or charges heretofore or hereafter collected by a corporation for utility services lawfully furnished by it which have been or shall hereafter lawfully be ordered refunded to consumers or other persons entitled thereto and any interest due thereon and which have remained unclaimed by the persons entitled thereto for 5 years from the date they became payable in accordance with the final determination or order providing for the refunds; (xi) amounts refundable from customer deposits heretofore or hereafter collected by a public utility and any interest due thereon, and which have remained unclaimed by the persons entitled thereto for 5 years from the date they become payable; (xii) sums held for the payment of outstanding pari-mutuel tickets; and (xiii) all other liquidated choses in action of whatsoever kind or character. For purposes of this subsection, the phrase "amounts received in consideration for gift certificates" shall not include amounts received in consideration for gift certificates having a face value of $5 or less and which are issued by a holder whose business is described in § 2906 of Title 30 whether or not such holder conducts such business within this State. The word "property" does not include:
a. Credits or deposits evidenced by cash balances on unclaimed or refused personal property nor any property, except the items specifically enumerated above in paragraph (11) of this section including specifically and without limitation consideration received for unredeemed gift certificates, the right to recover which in a proceeding brought by the owner would be barred by any statute of limitations, state or federal; or
b. Non-escheat capital credits as defined in § 909 of Title 26.
12 Del. C. 1953, § 1198; 58 Del. Laws, c. 275, § 1; 58 Del. Laws, c. 426, §§ 1-3; 59 Del. Laws, c. 320, §§ 1, 2; 63 Del. Laws, c. 311, § 4; 65 Del. Laws, c. 351, §§ 1-3; 66 Del. Laws, c. 379, §§ 3, 4; 67 Del. Laws, c. 264, §§ 1-3; 68 Del. Laws, c. 122, § 10; 69 Del. Laws, c. 180, §§ 1, 2; 70 Del. Laws, c. 186, § 1; 70 Del. Laws, c. 298, § 2; 71 Del. Laws, c. 448, § 1; 72 Del. Laws, c. 45, § 2; 75 Del. Laws, c. 19, § 3; 76 Del. Laws, c. 276, §§ 1, 2; 76 Del. Laws, c. 277, §§ 1, 2; 77 Del. Laws, c. 417, § 11.;
§ 1199. Report by holders of abandoned property.
(a) Every holder of funds or other property, tangible or intangible, deemed abandoned under this subchapter shall file with the State Escheator, on or before March 1 of each year, as of December 31 next preceding, a report with respect to such property. The report shall be verified and shall include:
(1) The name, if known, and last known address, if any, of each person appearing from the records of the holder to be the owner of any property deemed abandoned under this subchapter;
(2) The nature and identifying number, if any, or description of the property and the amount appearing from the records to be due, except that items of value under $50 each may be reported in aggregate;
(3) The date when the property became payable, demandable or returnable and the date of the last transaction with the owner with respect to the property; and
(4) Other information which the State Escheator may prescribe.
(b) Upon written request the State Escheator may grant an extension of time with respect to the date for filing the report.
(c) The requirements of this section for filing an annual report shall not apply to municipal corporations or counties and the fiscal officers thereof.
(d) Verification, if made by a partnership, shall be executed by a partner, if made by an unincorporated association or private corporation, by an officer and if made by a public corporation, by its chief fiscal officer.
(e) If the person holding property deemed abandoned is a successor to other persons who previously held the property for the owner or if the holder has changed name while holding the property, the person holding the property shall file with the report all prior known names and addresses of each holder of the property.
(f)(1) With respect to any stock or other certificate of ownership or any dividend, profit, distribution, interest, payment on principal or other sum held owing by a corporation or other business association for or to a shareholder, certificate holder, member, bondholder or other security holder, the initial report filed under this section shall include all such items of property deemed abandoned under this subchapter without limitation as to time.
(2) Except as provided in paragraph (1) of this subsection, the initial report shall include all such items of property which, under this subchapter, would have been deemed abandoned on the effective date of this subchapter had this subchapter been in effect on January 1, 1964.
(g) No reporting shall be required solely by virtue of holding property constituting consideration paid for unredeemed gift certificates which, in the aggregate, for the reporting period have a face value of less than $5,000 or for gift certificates having a face value of $5 or under issued by a holder whose business is described in § 2906 of Title 30 whether or not such firm conducts business in this State.
12 Del. C. 1953, § 1199; 58 Del. Laws, c. 275, § 1; 58 Del. Laws, c. 426, § 4; 66 Del. Laws, c. 379, § 6; 67 Del. Laws, c. 264, § 5; 70 Del. Laws, c. 186, § 1; 70 Del. Laws, c. 298, § 3; 72 Del. Laws, c. 45, § 1.;
§ 1200. [Reserved.]
§ 1201. Payment or delivery of abandoned property.
(a) On or before the date required for the filing of the report pursuant to § 1199 of this title, every holder of abandoned property shall pay or deliver to the State Escheator all abandoned property specified in the report, except that if it appears the reported abandonment is erroneous, the holder need not pay or deliver the property, which will no longer be deemed abandoned, to the State Escheator, but in lieu thereof shall file a verified written explanation of the proof of claim or other reason. The holder of any intangible ownership interest in a corporation deemed abandoned under this subchapter shall, when making the delivery contemplated by this section:
(1) If such interest is a certificated security as defined in § 8-102(a) of Title 6 deliver either the original stock certificate evidencing the abandoned property, if such is in its possession or a duly issued replacement certificate evidencing such property in a form suitable for transfer; or
(2) If such interest is an uncertificated security as defined in § 8-102(a) of Title 6 cause such uncertificated security to be registered in the name of the State Escheator.
(b) [Deleted.]
12 Del. C. 1953, § 1201; 58 Del. Laws, c. 275, § 1; 58 Del. Laws, c. 426, § 6; 65 Del. Laws, c. 351, § 4; 68 Del. Laws, c. 122, § 3; 69 Del. Laws, c. 180, §§ 3, 4; 75 Del. Laws, c. 19, §§ 1, 2.;
§ 1202. Periods of limitation not a bar.
The expiration of any period of time specified by statute or court order, during which an action or proceeding may be commenced or enforced to obtain payment of a claim for money or recovery of property, shall not prevent the money or property from being deemed abandoned property nor affect any duty to file a report required by this subchapter or to pay or deliver abandoned property to the State Escheator.
12 Del. C. 1953, § 1202; 58 Del. Laws, c. 275, § 1; 58 Del. Laws, c. 426, § 7.;
§ 1203. Effect of payment and delivery.
(a) The payment or delivery of property to the State Escheator by any holder shall terminate any legal relationship between the holder and the owner and shall release and discharge such holder from any and all liability to the owner, the owner's heirs, personal representatives, successors and assigns by reason of such delivery or payment, regardless of whether such property is in fact and in law abandoned property and such delivery and payment may be pleaded as a bar to recovery and shall be a conclusive defense in any suit or action brought by such owner, the owner's heirs, personal representatives, successors and assigns or any claimant against the holder by reason of such delivery or payment.
(b) Upon the delivery in good faith of a duplicate certificated security to the State Escheator or the registration of an uncertificated security to the State Escheator pursuant to § 1201 of this title, the holder and any transfer agent, registrar or other person acting for or on behalf of the holder in executing or delivering such duplicate certificate or effectuating such registration, is relieved of all liability of every kind to every person, including any person acquiring the original of a certificated security or the duplicate of a certificated security issued to the State Escheator, for any losses or damages resulting to any person by issuance and delivery to the State Escheator of the duplicate certificated security or the registration to the holder's name of an uncertificated security.
(c) If the holder pays or delivers property to the State Escheator in good faith and thereafter another person claims the property from the holder or another state claims the money or property under its laws relating to escheat or abandoned or unclaimed property, the State Escheator acting on behalf of the State, upon written notice of the claim, shall defend the holder against the claim and indemnify the holder against any liability on the claim.
(d) For the purposes of this section, "good faith" means that:
(1) Payment or delivery was made in a reasonable attempt to comply with this subchapter;
(2) The person delivering the property was not a fiduciary then in breach of trust in respect to the property and had a reasonable basis for believing, based on the facts then known to the person, that the property was abandoned for the purposes of this subchapter; and
(3) There is no showing that the records pursuant to which the delivery was made did not meet reasonable commercial standards of practice in the industry.
(e) The State Escheator at the request of a holder and in the State Escheator's sole discretion, may allow a holder to pay over or deliver property otherwise properly payable to the State but against which a full period of dormancy has not yet run. In the event the State Escheator acquiesces to the request and accepts such property, the holder shall be entitled to the protections of this section and the property shall be treated generally as if it had been paid over after a full period of dormancy had run. The provisions of §§ 1145 and 1206(c) of this title shall not apply to property accepted by the State Escheator under this subsection until a full period of dormancy has run against the property.
12 Del. C. 1953, § 1203; 58 Del. Laws, c. 426, § 8; 65 Del. Laws, c. 351, § 5; 70 Del. Laws, c. 186, § 1; 75 Del. Laws, c. 19, § 4.;
§ 1204. Sale of abandoned property.
(a) All abandoned property, other than money, delivered to the State Escheator under this subchapter shall be sold or disposed of in accordance with § 1143 of this title.
(b) All sales of property made by the State Escheator under this subchapter shall pass absolute title to the purchaser. The State Escheator or the Secretary of State shall execute all documents necessary to complete the transfer of title.
12 Del. C. 1953, § 1204; 58 Del. Laws, c. 426, § 9.;
§ 1205. Deposit and disbursement of funds.
(a) All funds received by the State Escheator under this subchapter, including the proceeds of sale under § 1204 of this title, shall forthwith be paid and deposited into the General Fund of the State.
(b) All disbursements for expenses, claims, storage, etc., made or authorized by the State Escheator in connection with the administration of this subchapter shall be paid by the Secretary of Finance upon presentation of a signed voucher by the State Escheator.
12 Del. C. 1953, § 1205; 58 Del. Laws, c. 426, § 10.;
§ 1206. Claims for abandoned property paid or delivered; determination of claims; appeals.
(a) Any person claiming an interest in any property paid or delivered to the State Escheator under this subchapter may file a claim thereto or to the proceeds from the sale thereof with the State Escheator.
(b) The determination of claims and rights of appeal shall be accomplished as prescribed in § 1146(b) of this title.
(c) When property is paid or delivered to the State Escheator under this subchapter, the owner is not entitled to receive income or other increments accruing thereafter.
12 Del. C. 1953, § 1206; 58 Del. Laws, c. 426, § 11.;
§ 1207. Penalties and interest.
Transferred by 73 Del. Laws, c. 417, § 4, effective July 22, 2002, and effective for reports filed or required to be filed on or after July 22, 2002.
§ 1208. Rules and regulations.
The State Escheator may make such rules and regulations as the Escheator may deem necessary to administer and enforce this subchapter.
12 Del. C. 1953, § 1208; 58 Del. Laws, c. 426, § 13; 70 Del. Laws, c. 186, § 1.;
§ 1209. [Reserved.]
§ 1210. No private escheats.
Any provision in a certificate of incorporation, by law, trust agreement, contract or any other writing regulating the relationships between an owner and a holder, relating to property with the exception of non-escheat capital credits as defined in § 909 of Title 26, which is or may be subject to the provisions of this chapter, which provides that upon the owner's failure to act or make a claim regarding property in possession of the holder, that such property reverts to or becomes the property of the holder, in contravention of this chapter, shall be void and unenforceable.
68 Del. Laws, c. 122, § 13; 71 Del. Laws, c. 448, § 2.;
§ 1211. Limited exception, uninvoiced payables not reportable.
(a) Property as defined in § 1198 of this title shall be deemed to exclude uninvoiced payables as more particularly defined in this section.
(b) "Uninvoiced payables" are amounts due between merchants as defined in the Delaware Uniform Commercial Code, §§ 1-101 et seq. of Title 6, from a holder who is a buyer to a creditor who is the seller of goods ordered by a holder in the ordinary course of business when the goods were received and accepted by the holder, but which for any reason were never invoiced by the seller.
(c) Uninvoiced payables include the value of goods received by a holder from a seller from out of balance transactions where the holder's purchase order for goods and the amount of goods received by the holder do not match.
(d) Uninvoiced payables include unsolicited goods received by a holder from a seller that fall within § 2505 of Title 6.
(e) Uninvoiced payables specifically do not include accounts payable, accounts receivable, or any other type of credit or amount due to the creditor, including uncashed checks of any kind whatsoever whether relating to inventory, goods, or services, and all of these types of property are still reportable as abandoned or unclaimed property.
(f) Nothing in this section shall be construed to create a business-to-business exemption of any kind regardless of whether a current business relationship exists between the holder and the creditor.
77 Del. Laws, c. 417, § 2.;
§ 1212. No private escheat of gift certificates.
Any provision on or relating to any gift certificate the amount paid in consideration of which is defined as "property" for purposes of this chapter, which provides that, upon the owner's failure to act or make a claim pursuant to such gift certificate within a certain period of time, the owner of the gift certificate shall lose rights with respect to the gift certificate against the issuer, which provision, if applied as against the State Escheator, would have the effect of defeating the escheat of any amount with regard to such gift certificate, shall be unenforceable as against the State Escheator.
67 Del. Laws, c. 264, § 4.;