Treasurer Kennedy Says Lawsuit is First Of Its Kind

BATON ROUGE, LA – State Treasurer John Kennedy today announced that Louisiana has joined 42 other states in a first of its kind lawsuit to force the former issuer of Western Union money orders to return $8.6 million in uncashed money orders.

The lawsuit was filed in U.S. Bankruptcy Court in New Jersey, against New Valley Corp. of Miami, Florida. The suit alleges New Valley Corp. failed to notify more than 31,000 purchasers or payees of $8.6 million in unclaimed money orders prior to the company’s restructuring in a bankruptcy case in November 1991.

Money orders are frequently used by people who are unable to open bank accounts or are sending money to relatives in foreign countries. Not surprisingly, money transfers go unclaimed either because the recipient fails to cash the payment or the sender fails to receive the refund for an undelivered money transfer, said Kennedy.

This is a first of its kind lawsuit that will stop New Valley Corp. from pocketing millions of dollars that rightfully belong to persons who can ill-afford to lose their hard-earned money, he said.

New Valley Corp. was previously known as the Western Union Telegraph Company, which issued the well-known Western Union Money Transfer, a means by which money could be telegraphically sent to persons in distant places. New Valley was forced into bankruptcy on November 15, 1991, and in bankruptcy, Western Union Financial Services Inc. was sold to First Financial Management Corp. First Data Corp. now owns the business and neither it nor its practices are the subject of this litigation.

The Federal Bankruptcy Code requires the corporation to make a reasonably diligent effort to ascertain the identity of persons to whom it owed money, and give them notice of their claim. Kennedy said the suit alleges that New Valley has records with information regarding the senders and the recipients, but that the company has made no effort whatsoever to determine who was entitled to the unclaimed money transfers.

He said the states have been demanding payment of the unclaimed money transfers since September 30, 1993, and he noted that every state in the suit has a law providing that unclaimed funds must be turned over to the state for safekeeping until the lawful owners can be located.

Louisiana’s Unclaimed Property Program was transferred by the State Legislature from the Department of Revenue to the State Treasury on July 1, 2000. Treasurer Kennedy formerly served as Revenue Secretary where he managed the program for three years, returning more than $22 million to some 50,000 people.

We are asking the Bankruptcy Court to rule that New Valley Corp. pay its obligations. Our ultimate goal is to return the money to its rightful owners, said Kennedy.

Delia Taylor, Communications Director
(225) 342-0010