B-96052, MAY 21, 1956

B-96052: May 21, 1956

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NORTHLAND TRANSPORTATION COMPANY: REFERENCE IS MADE TO YOUR LETTERS OF MARCH 16 AND 28. THIS MATTER WAS ALSO THE SUBJECT OF AN INFORMAL CONFERENCE ON MAY 11. YOU WERE PAID $163. 500 COMPUTED FOR 63 DAYS AT THE RATE OF $53.938 PER DAY WHEREAS INTEREST SHOULD HAVE BEEN COMPUTED FOR A PERIOD OF ONLY 53 DAYS (MARCH 20 TO MAY 12. WAS WITHHELD PURSUANT TO THE PROVISIONS OF 31 U.S.C. 227 TO COVER A REPORTED INDEBTEDNESS OF $398. YOU WERE PAID THE SUMS OF $61. WAS CREDITED TO THE ACCOUNTS OF THE MARITIME ADMINISTRATION. THERE IS NOW WITHHELD THE SUM OF $93. YOUR LETTERS INDICATE THAT YOU ARE AGREEABLE TO SETOFF OF $81. IT IS NOT CLEAR WHETHER YOUR OFFER CONTEMPLATED THAT OUR ACCEPTANCE THEREOF WOULD CONSTITUTE A FINAL DETERMINATION OF THE AMOUNT OF THE INDEBTEDNESS.

B-96052, MAY 21, 1956

TO MR. R. C. ANDERSON, NORTHLAND TRANSPORTATION COMPANY:

REFERENCE IS MADE TO YOUR LETTERS OF MARCH 16 AND 28, 1956 CONCERNING THE DISPOSITION OF AMOUNTS PRESENTLY WITHHELD FROM A JUDGMENT RENDERED IN FAVOR OF YOUR COMPANY ON MARCH 20, 1950, IN THE AMOUNT OF $562,500, WITH INTEREST AT THE RATE OF 3 1/2 PERCENT UNTIL PAID. THIS MATTER WAS ALSO THE SUBJECT OF AN INFORMAL CONFERENCE ON MAY 11, 1956, BETWEEN MR. EWERS AND REPRESENTATIVES OF THE MARITIME COMMISSION AND OF THE GENERAL ACCOUNTING OFFICE.

IT APPEARS DESIRABLE TO SET FORTH AT THIS POINT THE ACTION TAKEN TO DATE WITH RESPECT TO THE MATTER. BY SETTLEMENT OF MAY 12, 1950, YOU WERE PAID $163,494.28, OF THE PRINCIPAL AMOUNT OF THE JUDGMENT, PLUS INTEREST OF $3,398.09. (THIS SUM OF $3,398.09 REPRESENTED INTEREST AT 3 1/2 PERCENT ON $562,500 COMPUTED FOR 63 DAYS AT THE RATE OF $53.938 PER DAY WHEREAS INTEREST SHOULD HAVE BEEN COMPUTED FOR A PERIOD OF ONLY 53 DAYS (MARCH 20 TO MAY 12, 1953/). THE BALANCE OF THE JUDGMENT, $399,005.72, WAS WITHHELD PURSUANT TO THE PROVISIONS OF 31 U.S.C. 227 TO COVER A REPORTED INDEBTEDNESS OF $398,505.72 TO THE MARITIME ADMINISTRATION AND $500 TO COVER ESTIMATED LEGAL FEES SHOULD IT BE NECESSARY TO REDUCE THE REPORTED DEBT TO JUDGMENT. BY SETTLEMENTS OF SEPTEMBER 20, 1950, OCTOBER 17, 1950, AND JANUARY 4, 1951, YOU WERE PAID THE SUMS OF $61,876.74, $22,535.44 AND $38.10, BY WHICH AMOUNTS THE MARITIME ADMINISTRATION DETERMINED THE PREVIOUSLY REPORTED INDEBTEDNESS HAD BEEN OVERSTATED. BY SETTLEMENT OF MAY 22, 1951, THE SUM OF $220,140.05, WHICH YOU CONCEDED TO BE DUE THE UNITED STATES, WAS CREDITED TO THE ACCOUNTS OF THE MARITIME ADMINISTRATION. AS A RESULT OF THOSE PAYMENTS AND AS INDICATED ABOVE, THERE IS NOW WITHHELD THE SUM OF $93,915.39, TOGETHER WITH $500 ESTIMATED LEGAL FEES, OR A TOTAL OF $94,415.39.

YOUR LETTERS INDICATE THAT YOU ARE AGREEABLE TO SETOFF OF $81,385.39 AGAINST THE REPORTED INDEBTEDNESS UNDER THE INTERIM OPERATING AGREEMENT.

IT IS NOT CLEAR WHETHER YOUR OFFER CONTEMPLATED THAT OUR ACCEPTANCE THEREOF WOULD CONSTITUTE A FINAL DETERMINATION OF THE AMOUNT OF THE INDEBTEDNESS. SINCE WE COULD NOT ACCEPT AN OFFER WHICH MIGHT PREJUDICE THE RIGHT OF THE GOVERNMENT TO RECOVER ANY AMOUNT BY WHICH YOUR INDEBTEDNESS MIGHT BE FOUND TO EXCEED $81,385.39, IN ORDER TO EFFECT A FINAL SETTLEMENT OF THE JUDGMENT THERE IS PRESENTED FOR YOUR CONSIDERATION THE FOLLOWING PROPOSAL:

THE SUM OF $81,385.39 WILL BE APPLIED (WITHOUT PREJUDICE TO FUTURE NEGOTIATIONS BETWEEN YOUR COMPANY AND THE MARITIME ADMINISTRATION AS TO ANY DEBITS OR CREDITS UNDER THE INTERIM OPERATING AGREEMENT OR ON ANY OTHER ACCOUNT) TO YOUR REPORTED INDEBTEDNESS UNDER THE INTERIM OPERATING AGREEMENT. THE DIFFERENCE BETWEEN THE SUM OF $81,385.39 AND THE PRINCIPAL AMOUNT OF THE JUDGMENT WITHHELD, $94,415.39, WOULD RESULT IN A BALANCE IN YOUR FAVOR OF $13,030. THIS AMOUNT WOULD BE REDUCED, HOWEVER, TO $12,490.62 BY REASON OF THE OVERPAYMENT OF $539.38REPRESENTING THE OVERPAYMENT OF INTEREST INCLUDED IN THE SETTLEMENT OF MAY 12, 1950, AS HERETOFORE EXPLAINED.

IN ADDITION TO THE BALANCE OF $12,490.62 WHICH WOULD BE PAID TO YOU, YOU WOULD BE PAID INTEREST ON SUCH SUM COMPUTED AT 3 1/2 PERCENT PER ANNUM FROM MAY 12, 1950, TO DATE OF PAYMENT. ALSO, YOU WOULD BE PAID INTEREST AT THE RATE OF 3 1/2 PERCENT ON THE AMOUNTS OF $61,876.74; $22,534.44; AND $38.10 TO BE COMPUTED FROM MAY 12, 1950, TO THE DATES ON WHICH THE RELATED SETTLEMENTS WERE ISSUED.

IT APPEARS THAT DISPOSITION OF THE MATTER AS HEREIN PROPOSED WOULD BE REASONABLE AND FAIR TO ALL PARTIES CONCERNED AND WE REQUEST THAT YOU PROMPTLY ADVISE US WHETHER OR NOT THE PROPOSED SETTLEMENT IS ACCEPTABLE TO YOU.