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States sue for unclaimed war bonds

WASHINGTON, Oct. 18 (UPI) -- Cash-strapped states are suing the U.S. federal government to collect billions of dollars in unclaimed World War II-era war bonds, officials say.

Six states -- Kentucky, Missouri, Montana, New Jersey, North Carolina and Oklahoma -- are suing in U.S. District Court in New Jersey, claiming Washington has done nothing to track down the original bondholders or their descendants after it came time to repay the bonds in the 1980s, The Washington Post reported Sunday.

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The states say their laws entitle them to take the unclaimed property, estimated at $16.7 billion, at a time when the recession has stretched resources and they could use the infusion of cash.

"The states are doing it because they need the money and because they have these statutes that clearly lay out what happens ... to unclaimed property," attorney Kirby McInerney, who is representing the six states, told the Post.

A judge could rule the U.S. Treasury could keep the unclaimed war bond proceeds, but if the states win, it could set a precedent allowing them to tap unclaimed U.S. bonds in the future, establishing a new revenue stream, the newspaper said.

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