CA, Inc.'s Answer and Counterclaim - Reed Smith

From the state tax library of Reed Smith LLPwww.reedsmith.com/DEtaxfor other related documents, please email ksollie@reedsmith.com101. CA offered to pay the State $3,585,978.00 in resolution of all unclaimed propertyliabilities potentially owed to the State, said amount including monies demanded by the Statethat were not owed to it, but which CA agreed to pay to the State in the interest of expedientlyresolving all open issues relating to CA's VDA.102. Upon its offer of payment to the State in the amount of $3,585,978.00, andnumerous times previously, CA had fully performed its contractual obligations under the VDA.103. Despite CA's full performance under the VDA, the State failed and refused tofulfill its corresponding obligations under the VDA. In particular, the State did not execute theVDA Agreement as the parties had agreed, and did not waive the assessment of interest andpenalties as the parties had agreed. In addition, the State continued to demand more than theamount it knew it was entitled to receive.104. The State did not respond to CA's June 26, 2008 Proposal and, to date, hasrefused to accept CA's offer of payment in the amount of $3,585,978.00.Retaliatory Audit105. Instead of accepting CA's offered payment and executing the VDA Agreement,on or about July 17, 2008, the State sent CA a notice of audit ("Notice of Audit"). A true andaccurate copy of a letter from Mark Udinski to Nancy E. Cooper, dated July 17, 2008, is attachedhereto as Exhibit F.106. The Notice of Audit stated that the State intended to audit CA for the periods1981 through the present, a period greater than that covered by CA's VDA.107. The Notice of Audit did not void or even mention CA's VDA.108. Prior to July 17, 2008, the State repeatedly admitted in correspondence to CA thatCA's VDA was in full force and effect.- 58 –