DELAWARE SUPREME COURT DECISION – FOUR ISSUES

The Delaware Supreme Court issued its decision, agreeing with plaintiff/appellant on each of the four certified questions:

1. The 2008 amendment to the Delaware period of dormancy is not retroactive;
2. The Delaware escheatment statute does not preclude common law actions for wrongful escheatment against holders, transfer agents, and other private third parties;
3. The  general immunity provision of the Delaware escheatment statute, Section 1203(a), does not apply to the escheatment of securities; only the "good faith delivery" immunity provision, Section 1203(b), applies in such cases; (Subsection 1203(a) grants immunity to any “holder” of “property”—including “intangible ownership interests in corporations”—that “pay[s] or deliver[s]” that property to the State Escheator. Subsection 1203(b) grants immunity to a “holder and any transfer agent” that “deliver[s] in good faith”)
4. The "good faith" requirement of Section 1203(b) is an affirmative defense that defendants must plead and prove.    …“ under Delaware law, the absence of “good faith” is not an element of a claim for relief from a wrongful escheat that a plaintiff owner must prove. Rather, “good faith” under Section 1203(b) is an affirmative defense that must be pleaded and proved by a defendant holder, transfer agent, registrar or agent of the holder that claims immunity from liability”.