Philadelphia, PA – Matt Haverstick, Joshua Voss, and Lorena Ahumada, of Kleinbard’s Litigation Department, along with the Pennsylvania Treasury’s Office of Chief Counsel, helped Pennsylvania secure a major victory in the fight to reclaim more than $10 million of unclaimed property which the Treasury Department argued was wrongly taken by Delaware.
Originally filed by Pennsylvania in February 2016, and subsequently joined by 29 other states, the dispute revolves around “official checks,” a form of money order payment, issued by MoneyGram Payment Systems, Inc., to customers who purchased them in Pennsylvania and never cashed them. The Pennsylvania Treasury maintained that Delaware violated the Disposition of Abandoned Money Order and Traveler’s Checks Act (The Act) by collecting funds from the abandoned checks.
Senior Judge Pierre N. Leval of the 2nd Circuit Court of Appeals was appointed by the U.S. Supreme Court as a Special Master to hear the case. Judge Leval conclusively determined that the disputed financial instruments are the very type of property that Congress intended to be subject to the priority rules under The Act, meaning that if unclaimed, the official checks are to be returned to the state in which they were originally purchased. Therefore, the checks at issue in this case were improperly escheated to Delaware.
Judge Leval recommended that the Supreme Court grant Pennsylvania’s motion for Partial Summary Judgement. His report applies to all 30 states now involved in the litigation. Delaware now has two weeks to file any objections to Judge Leval’s report. If it chooses to do so, Pennsylvania and the 29 other states will have one week to respond.
About Kleinbard LLC
Founded in 1939, Kleinbard is a respected Philadelphia-based law firm that provides sophisticated legal representation. Offering a range of legal services including business and finance, real estate, labor and employment, government relations, political law, intellectual property, litigation, trusts and estates, and taxation, Kleinbard works with companies looking for greater agility, intimate knowledge of their business, and exceptional client service. Kleinbard attorneys take a collaborative and relationship-first approach, functioning as both counselor and trusted adviser for closely-held businesses, public companies, financial institutions, governmental and quasi-governmental agencies, schools and universities, nonprofits, and individuals. For more information, please visit www.kleinbard.com.