Delaware’s unclaimed property gambit: Small state … Big bucks.

The state of Delaware is serious about collecting unclaimed property at corporations.The state of Delaware has a reputation for being very friendly to corporations. And that’s not just talk, because there are more corporations registered in Delaware than in any other state.

In fact, more than half of all publicly listed U.S. companies have chosen to incorporate in Delaware.

But it turns out that there’s another side to the coin: This “business friendly” state is also ruthless about going after the unclaimed property that these corporations possess.

Companies that are incorporated in Delaware are obligated to turn over all unclaimed monetary property to the state. And the state is relentless in pursuing those funds.

For unclaimed dividends and securities, the Delaware law kicks in after three years. For other unclaimed property such as gift certificate balances and life insurance benefits, the state claims possession after five years.

There’s criticism, of course. Many contend that Delaware is unduly onerous in its unclaimed property dictates when compared to other states.

Chances are, such criticism falls on deaf ears. Why? I like what Chris Hopkins, a lawyer with Crowe Horwath LLP, says about the situation: “Unclaimed property is crack for the state of Delaware,” he contends.

And how much is the unclaimed property worth? Estimates are that Delaware has collected more than $1.2 billion in property, interest and penalties in just the past three years. The state uses the proceeds it collects to conduct state business – just as it would using state income tax revenues.

And woe to any company that neglects to keep proper tabs on its unclaimed property, because Delaware looks back more than 30 years when it conducts audits.

How many companies have robust records going back that far?

No records? No problem! The state will cheerfully estimate the amount your company owes – along with all of the accrued interest and penalties, of course. And they’ll accept your payment with a smile.

But there’s been enough grumbling about the record-keeping requirements that the state has grudgingly initiated a “temporary voluntary disclosure program,” wherein companies can make a good faith effort to identify unclaimed property dating back to “only” 1996.

If companies can show that they aren’t hiding any problems, the state will forego further auditing back into prior years.

Delaware Secretary of State Jeffrey Bullock stated this about the new voluntary program: “There was a recognition that we had to come up with a better system to meet the ultimate goal, which is to have companies in compliance.”

So which goal is it?  Companies in compliance? … Or a cool billion in added revenues for the state’s coffers?

You know the answer.

Projectile Pumpkins: More Popular than Ever

Punkin' Chunkin' "Big Guns"This past weekend, “Mrs. Nones Notes” and I hauled ourselves over to Southern Delaware and paid a visit to the national championship Punkin’ Chunkin’ competition.

For those who are unfamiliar with this pastime, you might think that people who get their jollies firing pumpkins hundreds or thousands of feet into the air using devices like catapults and pneumatic air cannons might be out of their gourds. But the annual Punkin’ Chunkin’ competition has become something of a national craze – especially after the Discovery Science Channel decided to air a special about the event in 2008. TV ratings were strong and media coverage has expanded each year since.

In fact, this year’s event was the 25th anniversary of a competition that began in its first competition with just four contestants. This year, nearly 100 contestants participated in numerous classes – air, centrifugal, catapult, trebuchet, torsion … and yes, human-powered as well.

When we arrived at the competition venue on Saturday morning – basically a large field in rural Sussex County – it became evident quite quickly that the torrential rains from Thursday had turned the viewing area into a sea of mud. As we were slogging our way up to the viewing area and very nearly coming out of our shoes as they sank into the mire, I couldn’t help but think of a work colleague’s story of surviving his own personal Woodstock Festival “soggy adventure” in 1969.

Let’s just say that the mud, coupled with the brisk winds and cold temperatures, made for a “challenging” outdoor environment.

But all that was soon forgotten when the “big guns” began their loudly impressive battery of air-powered pumpkin chunking. All thoughts of Woodstock disappeared and I was instead reminded of my grand-uncle’s tales of World War I warfare in the muddy trenches of Northern France.

I’d love to report that we were able to see the pumpkins as they were launched into the air to land 3,500 or more feet in the distance … but the truth of the matter is that the projectile pumpkins flew so fast, it was well-nigh impossible to see them. The only pumpkin we saw “airborne” was an unfortunate misfire by one of the catapults, which flung the pumpkin only a few dozen feet above ground level and then landed with a sickening thud.

One thing was abundantly clear: all the contestants take their pumpkin chunking very seriously! In all, it was an exciting time, and it made me realize why the activity has become progressively more popular over time. One of my business clients – Kaeser Compressors – sensed the competition’s potential early on and became a supplier of compressed air for several of the contestants’ air cannon machines as far back 1999. Smart move.

And how popular is pumpkin chunking now? Popular enough that today, you can find any number of produce/harvest farms where you or your kids can step behind an air-powered cannon and shoot off your very own pumpkins.

Take a weekend outing. Pick up your pumpkins, Indian corn and mums, purchase some natural apple cider … and smash a few pumpkins for good measure. Some families are making it an annual tradition.

Perhaps the greatest proof of all that this pastime has really made it onto the big boards: Believe it or not, a European pumpkin chunking championship is now being held every year in Belgium.

First Euro Disney … now Punkin’ Chunkin’. For sure, the American cultural takeover of Europe is now complete!