B-135550, MAR. 29, 1960

B-135550: Mar 29, 1960

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ESQUIRE: FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 14. WILL DISCONTINUE MAKING PAYMENTS UNDER ITS AGREEMENT TO PAY $500 A MONTH IN REDUCTION OF ITS INDEBTEDNESS TO THE UNITED STATES. IS ONE OF THE INTERVENORS IN ASSOCIATED AIR TRANSPORT. WHILE THE CASE WAS PENDING IN THAT COURT. THE PARTIES AGREED BY STIPULATION TO TAKE NO ACTION ON THE CROSS CLAIMS OF THE INTERVENORS AND THE UNITED STATES UNTIL A FINAL JUDGMENT IS ENTERED IN THE CASE ON THE CROSS CLAIMS OF ASSOCIATED AIR TRANSPORT AND THE UNITED STATES. THE CASE WAS SUBMITTED ON CROSS APPEALS TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT. SO LONG AS IT IS DETERMINED THAT THE INTERESTS OF THE UNITED STATES ARE BEST SERVED BY THE CONTINUANCE OF PRESENT PROCEDURES.

B-135550, MAR. 29, 1960

TO COATES LEAR, ESQUIRE:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 14, 1959, IN WHICH YOU ADVISE THAT WORLD AIRWAYS, INC. WILL DISCONTINUE MAKING PAYMENTS UNDER ITS AGREEMENT TO PAY $500 A MONTH IN REDUCTION OF ITS INDEBTEDNESS TO THE UNITED STATES. THE INDEBTEDNESS AROSE FROM OVERPAYMENTS MADE TO THE CARRIER FOR COMMERCIAL AIR MOVEMENTS (CAMS) FLOWN FOR THE MILITARY SERVICES.

AS INDICATED IN YOUR LETTER, WORLD AIRWAYS, INC. IS ONE OF THE INTERVENORS IN ASSOCIATED AIR TRANSPORT, INC. V. UNITED STATES, UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA, NO. 6817-M CIVIL. THE UNITED STATES HAS FILED A COUNTERCLAIM AGAINST THE INTERVENOR. WHILE THE CASE WAS PENDING IN THAT COURT, THE PARTIES AGREED BY STIPULATION TO TAKE NO ACTION ON THE CROSS CLAIMS OF THE INTERVENORS AND THE UNITED STATES UNTIL A FINAL JUDGMENT IS ENTERED IN THE CASE ON THE CROSS CLAIMS OF ASSOCIATED AIR TRANSPORT AND THE UNITED STATES. THE CASE WAS SUBMITTED ON CROSS APPEALS TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT. UNITED STATES V. ASSOCIATED AIR TRANSPORT, INC., ET AL., NO. 17607. ON MARCH 8, 1960, THE COURT OF APPEALS REMANDED THE CASE TO THE DISTRICT COURT FOR FURTHER PROCEEDINGS. PENDING THE FINAL DISPOSITION OF THOSE PROCEEDINGS, SO LONG AS IT IS DETERMINED THAT THE INTERESTS OF THE UNITED STATES ARE BEST SERVED BY THE CONTINUANCE OF PRESENT PROCEDURES, NO FORCED COLLECTION ACTION WILL BE TAKEN ON THE CLAIMS AGAINST WORLD AIRWAYS WHICH ARE INVOLVED IN THE CASE.

AS OF MARCH 1, 1960, THE INDEBTEDNESS OF WORLD AIRWAYS, INC. WAS $46,367.07, OF WHICH $32,193.25, LESS $1,000, THE PROCEEDS OF TWO MONTHLY PAYMENTS, WAS ENTERED ON JUNE 5, 1958, AS A COUNTERCLAIM AGAINST WORLD AIRWAYS IN THE ASSOCIATED AIR TRANSPORT PROCEEDINGS. THE BALANCE, $14,173.82 ($46,367.07 LESS $32,193.25), REPRESENTS THE AMOUNT OF THE INDEBTEDNESS WHICH IS NOT INVOLVED IN THE COUNTERCLAIM IN THOSE PROCEEDINGS.

WE HAVE RECEIVED $10,000 UNDER THE AGREEMENT TO PAY $500 MONTHLY, THE LAST PAYMENT BEING DATED OCTOBER 28, 1959. OF THAT AMOUNT, WE WILL HOLD $1,000 IN OUR SUSPENSE ACCOUNT FOR USE IN CONNECTION WITH THE CLAIMS IN THE COURT PROCEEDINGS. THE BALANCE, $9,000 WILL BE USED TO REDUCE FROM $14,173.82 TO $5,173.82, THE AMOUNT OF THE INDEBTEDNESS WHICH IS NOT INVOLVED IN THE COURT PROCEEDINGS. THIS ACTION IN NO WAY PREJUDICES SUCH RIGHTS AS YOUR CLIENT MAY HAVE IN CONNECTION WITH THE FUNDS CREDITED AGAINST THE OUTSTANDING OVERPAYMENTS. PENDING THE FINAL DISPOSITION OF THE COURT PROCEEDINGS, NO FURTHER COLLECTION ACTION WILL BE TAKEN ON THAT BALANCE ($5,173.82).