Judge blasts Delaware government in abandoned property suit

DOVER, DEL. A federal judge on Tuesday blasted Delaware's practice of collecting abandoned property, issuing a ruling that could have dire budget consequences for the state.

U.S. District Court Judge Gregory Sleet said Delaware's abandoned property, or escheat, practices violate due process and amount to a game of "gotcha" that "shocks the conscience."

The ruling came in a lawsuit in which packaging company Temple-Inland Inc., a subsidiary of Memphis-based International Paper, challenged Delaware's claim to almost $1.4 million in purported uncashed accounts payable and payroll checks.

Abandoned property is a critical source of funding for Delaware, amounting to about half a billion dollars annually and representing the state's third-largest revenue category.

State Finance Secretary Tom Cook said his agency was reviewing the decision with attorneys and had no immediate comment.

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