Delaware SOS VDA Outreach Update 2021
The Delaware Secretary of State’s (“SOS”) has recently posted a notice on its website stating that new rounds of invitations will be issued for holders to participate in the Delaware SOS Voluntary Disclosure Agreement (“VDA”) Program this year. The notices are slated to be mailed out on February 19th, May 14th and August 20th. In addition to inviting a company to participate in the SOS’ VDA Program, these outreach letters also put the company on notice that if it declines to participate, the Delaware Department of Finance will issue an audit notice 60 days after the date the letter was mailed to the company.
Why the two-step process? Delaware law provides that the Department of Finance cannot initiate new unclaimed property audits unless the SOS first notifies a company in writing that it has the option to enter into the SOS’ VDA Program. As a result, the notices are both invitations to the SOS VDA Program as well as the “first step” of the audit process.
Another Step in an Ongoing VDA Initiative
This current VDA outreach is the most recent of a series of such initiatives that started early last year:
- In our blog post on February 21, 2020, we announced that the Delaware Secretary of State’s (“SOS”) Office would be mailing over 100 “VDA invitation” letters to various companies identified as likely being out of compliance with Delaware’s unclaimed property statutes.
- We later reported that due to delays with the mail after the outbreak of COVID-19, an alert was posted on the State of Delaware’s website providing that holders who received an invitation from the SOS to join the VDA Program during February 2020 will be allowed to join the SOS VDA Program through May 22, 2020.
- On June 22, 2020, additional notices were sent by the SOS warning companies that had received the outreach letters that if they failed to respond to the invitation to enter into the SOS VDA Program by July 18, 2020, they will forward companies to Delaware Department of Finance for audit.
If your company receives an SOS VDA Program invitation:
- BE ON THE LOOKOUT. Notify your team that invitations for the SOS VDA Program may be coming. We believe only the unprecedented events of the last year have led to the repeated extensions that were offered by the SOS. If unanswered, the invitations to participate in the SOS VDA Program will likely lead to an audit notice.
- REVIEW YOUR OPTIONS. If you receive an invitation, assess your options carefully. Most companies will benefit by entering into the SOS VDA Program, but each company’s facts and circumstances are unique. In most cases, a company will benefit from speaking to counsel or holder advocates familiar with unclaimed property.
- RESPOND PROMPTLY. If you have determined that the SOS VDA Program is right for your company, make sure to respond as soon as possible to ensure its right to participate. If you have already missed a deadline to respond to a notice, your company may still be able to enter into the SOS VDA Program if an audit notice has not yet been issued.
We at True Partners Consulting have helped hundreds of organizations determine the right thing to do when presented with these options and stand ready to discuss all of your options with you at any time. Please reach out to any member of the True Partners Unclaimed Property Management Team if you have any questions about this or any other developments likely to impact your company.