Staples, Inc. and the State of Delaware issued a joint press release announcing that the lawsuit surrounding Delaware's audit of Staples, Inc.'s unclaimed property has been settled. The terms of the settlement are confidential.
From the press release:
Delaware Secretary of Finance Thomas J. Cook stated: “The State of Delaware is pleased to have been able to achieve a fair settlement with Staples. We appreciate Staples’s willingness to work towards a productive resolution of this dispute, which avoids the additional time and expense of protracted litigation.”
Violet Desilets, Vice President of Financial Services & Systems of Staples, Inc., noted: “Staples, Inc. is pleased to have reached an agreement with the State of Delaware resolving this matter. We were able to engage in cooperative and productive discussions with the State, and we appreciate the State promptly and professionally working with us to resolve this matter.”
The lawsuit stemmed from an audit that began in 2005. Staples had entered into a Voluntary Disclosure Agreement with Delaware in 2000 and thereafter filed regular reports with the State of Delaware. In 2005, Kelmar Associates, a contingency fee audit company, began auditing Staples on Delaware's behalf for compliance with unclaimed property laws. Kelmar issued Staples an assessment of nearly $4 million, including interest and penalties. Litigation on many issues, including applicability of statutes of limitation and the effect of the VDA, surrounding the audit ensued. Over the past two years, the litigation has continued to make news as the parties battled it in court out over those issues.
Since the parties settled the controversy, the issues raised by the litigation remain unsettled. Holders should proceed with caution as they continue their compliance efforts in the State of Delaware.