B-128872, B-134640, AUG. 1, 1958

B-128872, B-134640, AUG. 1, 1958

TO EDWARD K. WHEELER, ESQUIRE, CARE OF WHEELER AND WHEELER:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 16, 1958, ON BEHALF OF COASTAL AVIATION COMPANY, INC., IN WHICH YOU REQUEST THAT THE NAME OF YOUR CLIENT BE REMOVED FROM THE LIST OF INDEBTED CONTRACTORS SO THAT NO WITHHOLDINGS WILL BE MADE FROM EARNINGS OF THE CARRIER ARISING OUT OF CONTRACT AF 33/600/37799, RECENTLY NEGOTIATED WITH THE AIR FORCE.

INVESTIGATION SHOWS THAT THE CONTRACT IN QUESTION WAS MADE WITH COASTAL CARGO COMPANY, INC., WEST TRENTON, NEW JERSEY, RATHER THAN WITH COASTAL AVIATION COMPANY, INC. HOWEVER, WE UNDERSTAND THAT THESE TWO CORPORATIONS HAVE A CLOSE AFFINITY IN THAT BOTH HAVE THE SAME OFFICERS AND DIRECTORS AND, THEREFORE, WE ASSUME THAT YOUR REQUEST APPLIES ALIKE TO BOTH CORPORATIONS.

THE PRESENT INDEBTEDNESS OF COASTAL CARGO COMPANY, INC., TO THE UNITED STATES FOR OVERPAYMENTS IN CONNECTION WITH TRANSPORTATION SERVICES RENDERED FOR THE MILITARY AGENCIES DURING THE YEARS 1951 TO 1955, INCLUSIVE, IS $17,571.20. AS STATED IN YOUR LETTER, THERE IS PENDING IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY, TRENTON DIVISION, A SUIT DESIGNATED AS CIVIL ACTION NO. 527-57, BROUGHT BY THE UNITED STATES, TO RECOVER THE SAID OVERPAYMENTS, AS WELL AS A TUCKER ACT SUIT BY COASTAL CARGO COMPANY, INC., DESIGNATED AS CIVIL ACTION NO. 1195- 57, IN WHICH THE CARRIER SEEKS RECOVERY OF CERTAIN CLAIMED UNDERCHARGES ARISING OUT OF SOME OF THE SAME TRANSACTIONS WHICH GENERATED THE GOVERNMENT'S CLAIMS AGAINST COASTAL CARGO COMPANY, INC. IT HAS BEEN INDICATED THAT THESE TWO CASES MAY BE CONSOLIDATED AND TRIED ON A SINGLE RECORD. IN THE MEANTIME, CERTAIN FUNDS OTHERWISE DUE COASTAL AVIATION COMPANY, INC., HAVE BEEN FORWARDED HERE FOR USE IN LIQUIDATION OF THE INDEBTEDNESS OF COASTAL CARGO COMPANY, INC., TO THE UNITED STATES. SINCE OUR CLAIMS ARE NOW IN LITIGATION, SUCH FUNDS, TO THE EXTENT OF $5,833.32, HAVE BEEN PLACED IN OUR SUSPENSE ACCOUNT AND WILL BE HELD THERE, PENDING THE OUTCOME OF THE LITIGATION MENTIONED ABOVE.

IN YOUR LETTER OF JULY 16, 1958, IT IS PROPOSED THAT COASTAL WILL PAY TO THE UNITED STATES THE SUM OF $800 PER MONTH UNDER PROTEST AS PAYMENT AGAINST THE REMAINDER DUE ON THE CLAIMS OF THE GOVERNMENT AGAINST IT, SUBJECT TO THE ULTIMATE DETERMINATION OF THE LEGALITY OF SUCH CLAIMS AND WITHOUT PREJUDICE TO ITS RIGHT TO CONTINUE TO PURSUE ITS COUNTERCLAIMS AGAINST THE UNITED STATES OR TO BRING ANOTHER ACTION TO RECOVER PAYMENT IN ANY APPROPRIATE COURT.

YOUR OFFER IS ACCEPTED, WITH THE UNDERSTANDING THAT THE FUNDS SO PAID UNDER PROTEST WILL ALSO BE HELD IN OUR SUSPENSE ACCOUNT, PENDING THE OUTCOME OF THE LITIGATION MENTIONED ABOVE, AND SUBJECT TO TWO CONDITIONS, AS FOLLOWS: (1) THAT THE REMITTANCES BE BY CERTIFIED CHECK MADE PAYABLE TO THE TREASURER OF THE UNITED STATES, AND (2) THAT EACH SUCH CHECK BE MAILED SO AS TO REACH OUR TRANSPORTATION DIVISION NOT LATER THAN THE 10TH DAY OF EACH MONTH. FAILURE TO MEET THE CONDITIONS OUTLINED ABOVE WILL RESULT IN THE IMMEDIATE RESTORATION OF THE CARRIERS' NAMES TO THE LIST OF INDEBTED CONTRACTORS.

UPON RECEIPT OF ADVICE FROM YOU THAT THESE CONDITIONS ARE SATISFACTORY, WE WILL TAKE THE NECESSARY STEPS TO HAVE YOUR CLIENTS' NAMES REMOVED FROM THE LIST OF CONTRACTORS INDEBTED TO THE UNITED STATES.