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.com170. The State does not have the right under the law or the Constitution to demand thatCA escheat property where the State purports to enforce rights that are greater than the rights ofthe purported Owner of that property.herein.COUNT I(Statutory Cause of Action - 12 Del. C. § 1156(b))171. CA repeats and realleges paragraphs 1 through 171 above, as if fully set forth172. The statute codified at 12 Del. C. § 1156(b) provides that a Holder that disputeswhether reasonable cause exists for abating a penalty or interest determination by the StateEscheator may bring an action in the Court of Chancery for the purpose of showing an abuse ofdiscretion by the State Escheator in making the determination that a penalty or interest is due.173. Pursuant to the VDA, CA and the State agreed that CA is not subject to interest orpenalties in connection with the abandoned and unclaimed property at issue.174. Pursuant to the VDA, the State agreed to waive interest and penalties for CA.175. At all times, CA acted in good faith and provided the State with all of theinformation that it requested in connection with the VDA.176. During the VDA process, the State acted in bad faith and demanded that CA payamounts that it knew in good faith were not owed to the State.177. Despite CA's good faith and cooperation with the State, in addition to demandingmore than it knows it is owed, the State is attempting to assess interest against CA in connectionwith the State’s claims for abandoned and unclaimed property.178. The State's imposition of interest and/or penalties on CA is not reasonable and isan abuse of discretion.- 68 –