Former Employee Blows the Whistle on Delaware Unclaimed Property Exposure


In a recent unpublished decision, the Superior Court of Delaware, New Castle County, decided to allow a business entity’s former tax manager, joining with the attorney general for the state of Delaware, to proceed with a False Claims Act (“FCA”) case against the entity. The claim alleges that SourceGas Distribution, LLC (“SourceGas”) failed to remit unclaimed property, which the tax manager had identified, to the state. The property came into SourceGas’ possession through an acquisition of a retail gas distribution business from Kinder Morgan. The record was unclear regarding whether Kinder Morgan’s state of incorporation was Delaware or Kansas.

The court permitted a single allegation to proceed past the defendants’ motion to dismiss—the allegation that the company had changed the name of an acquired liability account from “Unclaimed Property Liability” to “Converted Balance from Dec. 2004.” The court found this to be a sufficient allegation of an attempt to conceal unclaimed property from the state. The complaint also alleges that the company “refused to act” when Higgins, the tax manager, brought the issue to management’s attention.

Please see full Alert below for further information.

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Reed Smith | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.