B-135550, B-127532, MAR. 31, 1958

B-127532,B-135550: Mar 31, 1958

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ESQUIRE: REFERENCE IS MADE TO YOUR LETTER DATED MARCH 12. WE ARE INFORMED THAT THIS INSTALLMENT ARRANGEMENT FOR PARTIAL LIQUIDATION OF SUCH INDEBTEDNESS HAS BEEN IN EFFECT SINCE SEPTEMBER 1. ADDITIONAL OVERPAYMENTS HAVE BEEN FOUND IN THE COURSE OF OUR AUDIT SINCE THAT TIME. A NUMBER OF SUPPLEMENTAL BILLS FOR ADDITIONAL CHARGES FOR TRANSPORTATION SERVICES HAVE BEEN PRESENTED BY WORLD AIRWAYS. 600 REPORTEDLY ARE NOW PENDING FOR SETTLEMENT IN OUR TRANSPORTATION DIVISION. HAS BEEN ACCORDED CONSIDERATE TREATMENT IN THE ADJUSTMENT OF ITS OBLIGATION TO THE UNITED STATES FOR OVERPAYMENTS WHICH IT IS OUR DUTY TO RECOVER PURSUANT TO THE PROVISIONS OF SECTION 322 OF THE TRANSPORTATION ACT OF 1940.

B-135550, B-127532, MAR. 31, 1958

TO COATES LEAR, ESQUIRE:

REFERENCE IS MADE TO YOUR LETTER DATED MARCH 12, 1958, CONCERNING THE ABOVE CARRIER. WE NOTE THAT WORLD AIRWAYS, INC., NOW PROPOSES TO DISCONTINUE ITS AGREED PAYMENTS OF $500 PER MONTH TO BE APPLIED IN THE LIQUIDATION OF OVERPAYMENTS OF TRANSPORTATION CHARGES FOR SERVICES RENDERED TO THE MILITARY AGENCIES IN CONNECTION WITH COMMERCIAL AIR MOVEMENTS (CAMS).

WE ARE INFORMED THAT THIS INSTALLMENT ARRANGEMENT FOR PARTIAL LIQUIDATION OF SUCH INDEBTEDNESS HAS BEEN IN EFFECT SINCE SEPTEMBER 1, 1954, AT WHICH TIME THE INDEBTEDNESS OF WORLD AIRWAYS, INC., TO THE UNITED STATES FOR OVERPAYMENTS IN TRANSPORTATION CHARGES AGGREGATED SOME $42,000. ADDITIONAL OVERPAYMENTS HAVE BEEN FOUND IN THE COURSE OF OUR AUDIT SINCE THAT TIME, SO THAT DESPITE THE REPAYMENT OF APPROXIMATELY $21,000 BETWEEN SEPTEMBER 1954, AND FEBRUARY 1958, THE CURRENT INDEBTEDNESS OF THE CARRIER TO THE UNITED STATES STANDS AT ALMOST $32,000.

DURING THE PAST FOUR YEARS, A NUMBER OF SUPPLEMENTAL BILLS FOR ADDITIONAL CHARGES FOR TRANSPORTATION SERVICES HAVE BEEN PRESENTED BY WORLD AIRWAYS, INC., AND SETTLED HERE PROMPTLY CONSISTENT WITH THE CIRCUMSTANCES PREVAILING, WITHOUT SETOFF FOR LIQUIDATION OF EXISTING OVERPAYMENTS. SIX SUCH CLAIMS FOR MORE THAN $1,600 REPORTEDLY ARE NOW PENDING FOR SETTLEMENT IN OUR TRANSPORTATION DIVISION.

A REVIEW OF THIS RECORD INDICATES THAT WORLD AIRWAYS, INC., HAS BEEN ACCORDED CONSIDERATE TREATMENT IN THE ADJUSTMENT OF ITS OBLIGATION TO THE UNITED STATES FOR OVERPAYMENTS WHICH IT IS OUR DUTY TO RECOVER PURSUANT TO THE PROVISIONS OF SECTION 322 OF THE TRANSPORTATION ACT OF 1940, 54 STAT. 955, 49 U.S.C. 66, DIRECTING THE PAYMENT OF BILLS FOR TRANSPORTATION CHARGES UPON PRESENTATION PRIOR TO AUDIT OR SETTLEMENT BY THE GENERAL ACCOUNTING OFFICE, BUT RESERVING TO THE UNITED STATES THE RIGHT TO RECOVER ANY OVERPAYMENTS SO MADE FROM ANY AMOUNTS SUBSEQUENTLY FOUND TO BE DUE SUCH CARRIER.

WITH RESPECT TO THE CASE OF ASSOCIATED AIR TRANSPORT, INC. V. UNITED STATES, NO. 6817-M, NOW PENDING IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA, MIAMI DIVISION, IT IS TRUE THAT YOUR CLIENT, WORLD AIRWAYS, INC., HAS BEEN PERMITTED TO INTERVENE THEREIN, AND TO FILE A SEPARATE COMPLAINT FOR THE ADDITIONAL CHARGES NOW CLAIMED DUE FOR CHARTER AIR SERVICES PERFORMED BY THE CARRIER FOR THE MILITARY DEPARTMENTS AND AGENCIES. IT HAS BEEN INFORMALLY AGREED BETWEEN COUNSEL IN THE SAID CAUSE THAT NO ACTION WILL BE TAKEN AS TO THE CLAIMS OF THE SEVERAL INTERVENERS (INCLUDING THE CLAIMS OF YOUR CLIENT) UNTIL SUCH TIME AS THE CLAIMS BY AND AGAINST ASSOCIATED AIR TRANSPORT, INC., ARE ADJUDICATED. IT REASONABLY MAY BE ASSUMED THAT IT WILL BE QUITE A WHILE BEFORE THE MERITS OF SUCH CLAIMS ARE DETERMINED.

WE ARE CONFIDENT THAT THE RESTRAINING ORDER ISSUED DECEMBER 11, 1957, AS SUBSEQUENTLY AMENDED ON DECEMBER 19, 1957, EVENTUALLY WILL BE ANNULLED, AND APPROPRIATE STEPS HAVE BEEN TAKEN TO SECURE A TEMPORARY STAY OF THAT ORDER PENDING THE HEARING OF AN APPEAL ON ITS MERITS. WE EXPECT A DETERMINATION OF THIS ISSUE WITHIN THE NEAR FUTURE, BUT FOR THE TIME BEING WE DO NOT INTEND TO DISTURB THE PRESENT SITUATION WITH RESPECT TO THE RECOVERY OF OVERPAYMENTS FROM THE CARRIERS COVERED BY THE SAID ORDER.

CONTRARY TO YOUR UNDERSTANDING, WE HAVE MADE NO "ARRANGEMENT" WITH THE INDEPENDENT AIRLINES ASSOCIATION, OR ANY OTHER REPRESENTATIVE OF ANY OF THE MEMBER CARRIERS, TO THE EFFECT THAT NONE OF THE CARRIERS INVOLVED IN THE ASSOCIATED AIR TRANSPORT CASE WILL MAKE FURTHER PAYMENTS TO OUR OFFICE SO LONG AS THE INJUNCTION ORDER WAS IN FORCE. IT IS NOT OUR PURPOSE TO ENCOURAGE THE CARRIERS TO DISCONTINUE MAKING REFUNDS TO OUR OFFICE IN LIQUIDATION OF OVERPAYMENTS ON PRIOR BILLS, IN ACCORDANCE WITH PRIOR ARRANGEMENTS MADE IN GOOD FAITH. WE UNDERSTAND THAT COUNSEL FOR THE CARRIERS WHO WERE INSTRUMENTAL IN SECURING THE RESTRAINING ORDER HAVE SUGGESTED TO THEIR CLIENTS HAVING EXISTING AGREEMENTS WITH THE GENERAL ACCOUNTING OFFICE FOR MONTHLY PAYMENTS THAT THEY SHOULD CONTINUE TO MAKE SUCH PAYMENTS, IF AT ALL POSSIBLE. THIS WAS OUR POSITION IN A RECENT DISCUSSION WITH COUNSEL FOR THE INDEPENDENT AIRLINES ASSOCIATION, WHO WAS INFORMED THAT, IN THE EVENT ANY OF THE SAID CARRIERS FAILED TO LIVE UP TO THEIR COMMITMENTS TO MAKE REGULAR PARTIAL REFUNDS, WE WOULD NOT AT THIS TIME ATTEMPT COLLECTION BY SETOFF. HE WAS FURTHER ADVISED THAT WE HAD RECOMMENDED TO THE ATTORNEY GENERAL THAT PROCEEDINGS FOR REVIEW OF THE SAID ORDER BE PROSECUTED AS PROMPTLY AS CIRCUMSTANCES WOULD PERMIT.

IN VIEW OF WHAT HAS BEEN SAID ABOVE AS TO THE RESTRAINING ORDER AND OUR PAST RELATIONSHIP WITH WORLD AIRWAYS, INC., WE ASSUME THAT YOUR CLIENT MIGHT WISH TO RECONSIDER ITS POSITION, WITH THE VIEW TO A CONTINUANCE OF THE REMITTANCE OF $500 MONTHLY.