Pair of Delaware Cases Attacks Delaware Estimation Practices

Two hands and arms pulling at American $100 bill - let's talk about the fight between Delaware and two different companies unclaimed property audits and estimations
On the heels of AT&T’s lawsuit against Delaware comes two more cases, attacking Delaware’s unclaimed property audit and estimation practices.

Both cases were filed in federal court in the District of Delaware.

As both cases have substantially the same fact pattern and legal issues, they are discussed here together. Notable differences are pointed out below.

Current Status of Eaton v. Geisenberger

Eaton filed its lawsuit against Delaware on December 12, 2019. The case is 19-cv-02269 and styled Eaton Corporation v. Geisenberger. Delaware used third-party auditor Kelmar Associates to audit Eaton.

Current Status of Fruit of the Loom v. Geisenberger

One day after Eaton, Fruit of the Loom v Geisenberger was filed on December 13, 2019. The case is 19-cv-02273.

The Fruit of the Loom (“FOTL”) audit was conducted by a relative newcomer to the unclaimed property audit landscape, Innovative Advocates Group (IAG).

Termination from Delaware Expedited Audit Program

Both Eaton and FOTL entered into Delaware’s expedited audit program, in the wake of the 2017 Delaware statutory amendments.

In 2019, both companies were terminated from the program after the companies objected to overly burdensome requests and highly inflated preliminary estimates.

You may also be interested in AT&T v. Geisenberger, a similar lawsuit based on the termination of the Delaware Expedited Audit Program. In the recent motion to dismiss, Delaware released the contract with Kelmar, dated December 31, 2019.

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