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B-138747, OCT. 27, 1960

B-138747 Oct 27, 1960
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ATKINS: REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 11. WE HAVE RECENTLY RECEIVED ADDITIONAL FUNDS DUE ON CURRENT ACCOUNTS OF THE CARRIER. YOU HAVE REPORTED THAT THE WITHHOLDING OF $8. YOU REPORT FURTHER THAT OPERATION OF TWO AIRCRAFT WILL PRODUCE A PROFIT OF ABOUT $5. YOU ARE ANXIOUS TO MAKE ARRANGEMENTS IN THE MEANTIME FOR THE LIQUIDATION OF THE REPORTED INDEBTEDNESS AT A RATE WHICH WILL ENABLE YOU TO STAY IN BUSINESS. WHICH ARE TO BE MADE BY AIR TRANSIT SERVICES. WE WILL RETAIN $1. 500 OF THE FUNDS WE ARE HOLDING AND WILL PROMPTLY RELEASE THE BALANCE TO AIR TRANSIT SERVICES. OUR CONCURRENCE IN THIS ARRANGEMENT IS FOUNDED UPON THE GOOD FAITH OF CENTRAL AIR TRANSPORT. WE WILL RECONSIDER THIS ARRANGEMENT TO DETERMINE WHETHER THERE SHOULD THEN BE ANY CHANGE IN ITS TERMS.

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B-138747, OCT. 27, 1960

TO MR. FRED R. ATKINS:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 11, 1960, FILE NO. 1371, AND TO YOUR SEVERAL TELEPHONE CONVERSATIONS WITH MR. E. W. CIMOKOWSKI, ASSISTANT GENERAL COUNSEL, CONCERNING THE INDEBTEDNESS OF CENTRAL AIR TRANSPORT, INC., TO THE UNITED STATES, IN THE AMOUNT OF $17,454.27, FOR TRANSPORTATION OVERCHARGES, AND TO FUNDS OF $8,226.25 HELD HERE FOR APPLICATION TO THAT INDEBTEDNESS. WE HAVE RECENTLY RECEIVED ADDITIONAL FUNDS DUE ON CURRENT ACCOUNTS OF THE CARRIER.

IN YOUR LETTER OF OCTOBER 11, YOU PROPOSED APPLICATION TO THE DEBT OF $500 OF THE SUM HELD ERE; RELEASE OF THE BALANCE TO CENTRAL AIR TRANSPORT, INC.; AND LIQUIDATION OF THE BALANCE OF THE DEBT THROUGH WEEKLY PAYMENTS OF $300 TO BE MADE BY YOUR LOCAL REPRESENTATIVE, AIR TRANSIT SERVICE, INC. THAT COMPANY, BY LETTER OF OCTOBER 19, INFORMED US OF THEIR WILLINGNESS TO COOPERATE IN THIS ARRANGEMENT. IN A LONG DISTANCE TELEPHONE CONVERSATION WITH MR. CIMOKOWSKI ON FRIDAY, OCTOBER 21, YOU RAISED THE INITIAL PAYMENT FROM $500 TO $1,500 BY AUTHORIZING RETENTION OF THAT AMOUNT FROM THE FUNDS HELD HERE.

ALTHOUGH YOUR LETTER DOES NOT CONTAIN SPECIFIC INFORMATION CONCERNING THE FINANCIAL POSITION OF CENTRAL AIR TRANSPORT, INC., YOU HAVE REPORTED THAT THE WITHHOLDING OF $8,226.25 (NOW INCREASED BY AN ADDITIONAL CHECK RECENTLY RECEIVED FROM THE ADMINISTRATIVE OFFICE) HAS IMPOSED A GREAT HARDSHIP ON YOUR COMPANY IN DEPRIVING IT OF OPERATING CAPITAL AND THAT SINCE SEPTEMBER 1, 1960, THE VOLUME OF YOUR BUSINESS HAS REQUIRED OPERATING TWO AIRCRAFT RATHER THAN ONE. YOU REPORT FURTHER THAT OPERATION OF TWO AIRCRAFT WILL PRODUCE A PROFIT OF ABOUT $5,000 PER MONTH, AND THAT WHILE YOU CONTINUE TO DISPUTE SOME OF THE OVERPAYMENTS STATED AGAINST YOUR COMPANY, YOU ARE ANXIOUS TO MAKE ARRANGEMENTS IN THE MEANTIME FOR THE LIQUIDATION OF THE REPORTED INDEBTEDNESS AT A RATE WHICH WILL ENABLE YOU TO STAY IN BUSINESS.

IN VIEW OF THE CIRCUMSTANCES INVOLVED WE CONCUR IN THE PROPOSED ARRANGEMENT, CONTINGENT UPON THE REGULARITY AND PROMPTNESS OF THE PROMISED WEEKLY PAYMENTS, WHICH ARE TO BE MADE BY AIR TRANSIT SERVICES, INC. WE WILL RETAIN $1,500 OF THE FUNDS WE ARE HOLDING AND WILL PROMPTLY RELEASE THE BALANCE TO AIR TRANSIT SERVICES, INC., FOR THE ACCOUNT OF CENTRAL AIR TRANSPORT, INC., IN ACCORDANCE WITH OUR UNDERSTANDING AS TO THE PROCEDURE AGREEABLE TO YOU. OUR CONCURRENCE IN THIS ARRANGEMENT IS FOUNDED UPON THE GOOD FAITH OF CENTRAL AIR TRANSPORT, INC., AND AIR TRANSIT SERVICES, INC., IN THE MAINTENANCE OF THE SCHEDULE OF PAYMENTS TO BE MADE, AND ASSUMES YOUR WILLINGNESS TO INCREASE THE WEEKLY PAYMENTS, UPON REVIEW OF THE MATTER, AS FUTURE OPERATIONS AND FINANCIAL CONDITIONS MAY WARRANT. AT THE END OF SIX MONTHS, OR SOONER, IF CONDITIONS REQUIRE IT, WE WILL RECONSIDER THIS ARRANGEMENT TO DETERMINE WHETHER THERE SHOULD THEN BE ANY CHANGE IN ITS TERMS. THIS UNDERSTANDING IS, OF COURSE, WITHOUT PREJUDICE TO ANY RIGHTS YOU MAY HAVE REGARDING THE ITEMS COMPRISING THE INDEBTEDNESS STATED AGAINST YOUR COMPANY.

YOU INDICATED THAT YOU WISHED TO DISCUSS IN PERSON DISPUTED ITEMS OF THE INDEBTEDNESS AND THAT YOU EXPECT TO BE IN WASHINGTON EARLY IN DECEMBER. PLEASE GIVE US SEVERAL DAYS ADVANCE NOTICE OF YOUR INTENTION TO VISIT OUR OFFICE. WE ARE WRITING THE DEPARTMENT OF JUSTICE AND AIR TRANSIT SERVICES, INC., TO INFORM THEM OF THE PRESENT DEVELOPMENT.

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