Univar targets Delaware officials in dispute over use of Abandoned and Unclaimed Property law

By Chandra Lye | Dec 31, 2018

WILMINGTON, Del. (Legal Newsline) – Global chemical company Univar has sued Delaware’s secretary of finance and other government officials over allegations they are unfairly targeting the company using a property law.

Univar claims, according to the court filing, that the state of Delaware has allowed a property audit that is illegal on several grounds, including infringement of Univar's rights to be free from unreasonable searches and seizures and a denial of the company's due process rights and procedural due process rights. 

They also argue that the action of the government has led to an "unconstitutional taking of private property for public use without just compensation" as well as a violation of the 14th Amendment right to equal protection of the laws, according to its Dec. 3 complaint for declaratory and injunctive relief.

The complaint was filed in the U.S. District Court for the District of Delaware.

In the complaint, Univar claims the state agents, Secretary of Finance Richard Geisenberger, State Escheator Brenda Mayrack and Assistant Director for the Department of Finance Michelle Sullivan have used the Abandoned and Unclaimed Property Law to develop revenue, which has “require(d) large companies, like Univar, to submit to wide-ranging, lengthy audits going back at least 27 years in the past.”

It also notes that “the document requests issued by Kelmar in connection with the audit exceed those permissible under the Fourth Amendment.”

One of Univar’s major complaints is that “The retroactive application of penalties and estimates of liability based on a failure to keep records that were not previously required by law to be kept also violates Univar's due process rights.”

The company also states in its complaint that estimation is required because they do not “have a standard record retention policy that causes records to be retained back to 1991."

"Any Kelmar estimation methodology that uses prior unclaimed property filings reported to other states will lead to misleading, inflated and unconstitutional estimated unclaimed property liabilities,” Univar’s court filing stated.

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