HOUSE BILL NO. 261
AN ACT TO AMEND CHAPTER 11, TITLE 12 OF THE DELAWARE CODE TO PROVIDE FOR THE ESCHEAT TO THE STATE OF INTANGIBLE OWNERSHIP INTERESTS IN CORPORATION WHEN DIVIDENDS OR OTHER DISTRIBUTIONS THEREON HAVE BEEN ABANDONED.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend subsection (6), Section 1198, subchapter IV, Chapter 11, Title 12, Delaware Code by inserting after the first sentence thereof the following:
"For purposes of this subchapter, the issuer of any intangible ownership interest in a corporation, whether or not represented by a stock certificate, which is registered on stock transfer or other like books of the issuer or its agent. shall be deemed a holder of such property."
Section 2. Amend subsection (8) Section 1198, subchapter IV, Chapter 11, Title 12, Delaware Code by striking the period at the end of the first sentence and inserting in lieu thereof the following:
"providing that with respect to an intangible ownership interest in a corporation, whether or not represented by a stock certificate, the period of dormancy means a period of 7 years during which (I) the owner has not claimed a dividend, distribution or other sum with respect to such interest, (2) the owner has not communicated in writing with the holder concerning such property or otherwise communicated with the holder concerning such property which communication is evidenced by a writing or other record prepared by the holder or its employee in the ordinary course of business and (3) at the end of which the holder does not know the current location of the owner of such property. A full period of dormancy shall be deemed to have run with respect to any dividends or other distributions held for or owing to an owner at the time a period of dormancy shall have run with respect to the intangible ownership interest in a corporation to which such dividend or other distribution attaches."
Section 3. Amend subsection (10) Section 1198, subchapter IV, Chapter 11, Title 12, Delaware Code by striking the word "stocks," after the numeral "(III)" and substituting in lieu thereof the following:
"intangible ownership interests in corporations, whether or not represented by a stock certificate,".
Section 4. Amend Section 1201, subchapter IV, Chapter 11, Title 12, Delaware Code by adding at the end of said Section the following:
"The holder of any intangible ownership interest In a corporation deemed abandoned under this subchapter shall, when making the delivery contemplated by this Section, (I) if such interest Is a certificated security as defined in 6 Del. C. §8-102(1) deliver either the original stock certificate evidencing the abandoned property, if such is in its possession or a duly Issued replacement certificate evidencing such property in a form suitable for transfer, or (U) If such interest Is an uncertificated security as defined in 6 Del.C. §8-201(1) cause such uncertificated security to be registered in the name of the State Escheator."
Section 5. Amend Section 1203, subchapter IV, Chapter 11, Title 12, Delaware Code by designating the current Section as subsection (a) and adding the following new subsections:
"(b) Upon the delivery in good faith of a duplicate certificated security to the State Escheator or the registration of an uncertificated security to the State Escheator pursuant to Section 1201 hereof, the holder and any transfer agent, registrar or other person acting for or on behalf of the holder in executing or delivering such duplicate certificate or effectuating such registration, is relieved of all liability of every kind to every person, including any person acquiring the original of a certificated security or the duplicate of a certificated security issued to the State Escheator, for any losses or damages resulting to any person by issuance and delivery to the State Escheator of the duplicate certificated security or the registration to his name of an uncertificated security.
(c) If the holder pays or delivers property to the State Escheator in good faith and thereafter another person claims the property from the holder or another state claims the money or property under its laws relating to escheat or abandoned or unclaimed property, the State Escheator acting on behalf of the State, upon written notice of the claim, shall defend the holder against the claim and indemnify the holder against any liability on the claim.
(d) For the purposes of this Seetion,'good faith' means that: (1) Payment or delivery was made in a reasonable attempt to comply with this Act;
(2) The person delivering the property was not a fiduciary then in breach of trust in respect to the property and had a reasonable basis for believing, based on the facts then known to him, that the property was abandoned for the purposes of this Act; and
(3) There is no showing that the records pursuant to which the delivery was made did not meet reasonable commercial standards of practice in the industry."
Approved June 30, 1986.