B-126290, JAN. 26, 1956

B-126290, JAN. 26, 1956

TO MR. JAMES K. KNUDSON, ATTORNEY:

THIS HAS REFERENCE TO YOUR LETTER DATED NOVEMBER 15, 1955, ON BEHALF OF U.S.A.C. TRANSPORT, C., DOVER, DELAWARE.

IT IS NOTED THAT MR. THOMAS W. MURRAY, THE FORMER PRESIDENT OF U.S.A.C. TRANSPORT, INC., HAS SOLD HIS INTEREST IN THE CORPORATION TO MR. J. P. KAVOORAS OF DOMINION AUTO CARRIERS, LTD., WINDSOR, ONTARIO, CANADA; THAT THE NEW MANAGEMENT OF THE CORPORATION IS ANXIOUS TO REACH A DETERMINATION OF (1) THE TOTAL INDEBTEDNESS OF THE CORPORATION, OR THOMAS W. MURRAY, TO THE UNITED STATES FOR OVERPAYMENTS MADE FOR SERVICES PERFORMED PRIOR TO OCTOBER 1, 1955, THE DATE OF THE ASSUMPTION OF CONTROL BY THE NEW OWNERS; (2) THE AMOUNT OF ANY LOSS AND DAMAGE CLAIMS WHICH THE UNITED STATES MAY HAVE AGAINST THE CORPORATION OR MR. MURRAY, OTHER THAN THE CLAIM FOR SOME $59,000 INVOLVED IN THE CASE OF UNITED STATES V. U.S.A.C. TRANSPORT, INC., CIVIL ACTION NO. 1615, IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE; AND (3) THE AMOUNT, IF ANY, DUE THE CORPORATION OR MR. MURRAY ON CERTAIN CLAIMS AGAINST THE UNITED STATES FOR ADDITIONAL TRANSPORTATION CHARGES ON SHIPMENTS WHICH OCCURRED PRIOR TO THE CUT-OFF DATE OF OCTOBER 1, 1955. YOU STATE THAT THESE ARE CLAIMS WHICH (A) HAVE ALREADY BEEN PRESENTED OR (B) MAY HEREAFTER BE PRESENTED FOR SETTLEMENT IN OUR TRANSPORTATION DIVISION.

A SURVEY HAS BEEN MADE TO DETERMINE THE STATUS OF THE AUDIT OF TRANSPORTATION PAYMENTS MADE TO U.S.A.C. TRANSPORT, INC., U.S. AEROPLANE CARRIERS, INC., AND TO THOMAS W. MURRAY, FOR SERVICES RENDERED PRIOR TO OCTOBER 1, 1955. IT APPEARS THAT ALL PAYMENTS MADE THROUGH SEPTEMBER 1953 HAVE BEEN AUDITED AND THAT TRANSACTIONS FOR THE LAST QUARTER OF 1953 ARE PRESENTLY UNDERGOING EXAMINATION IN OUR TRANSPORTATION DIVISION. FURTHERMORE, A SUBSTANTIAL PORTION OF THE PAYMENTS MADE TO THE CARRIER SINCE THE 5 PERCENT REFUND ARRANGEMENTS WERE MADE EARLY IN 1955 HAVE BEEN AUDITED AT THE TIME OF, OR SHORTLY AFTER, PAYMENT OF THE CARRIER'S BILLS.

IN THESE CIRCUMSTANCES, WE ARE WILLING TO AUTHORIZE AN ACCELERATED AUDIT OF THE REMAINING VOUCHERS AND AN EARLY SETTLEMENT OF ALL CLAIMS PERTAINING TO TRANSACTIONS WITH THIS CARRIER WHICH OCCURRED PRIOR TO OCTOBER 1, 1955, IN AN EFFORT TO ARRIVE AT THE DEBITS AND CREDITS AS SOON AS POSSIBLE.

AS STATED IN YOUR LETTER, MR. MURRAY AGREED WITH OUR TRANSPORTATION DIVISION TO REMIT MONTHLY 5 PERCENT OF CURRENT BILLINGS SUBMITTED FOR PAYMENT TO THE GOVERNMENT. SINCE MARCH 1, 1955, WE HAVE RECEIVED ALMOST $21,000 WHICH WILL BE APPLIED TO LIQUIDATE THE OUTSTANDING INDEBTEDNESS FOR OVERPAYMENTS AMOUNTING TO SOME $53,000 THAT HAVE BEEN DISCOVERED IN THE AUDIT ALREADY MADE. PENDING A DETERMINATION OF THE EXTENT OF THE OVERPAYMENTS, LESS ALLOWABLE CREDITS ON THE CLAIMS FOR ADDITIONAL CHARGES SUBMITTED BY THE CARRIER, WE WOULD BE WILLING TO ACCEPT FLAT MONTHLY PAYMENTS OF $2500 EACH MONTH IN LIEU OF THE 5 PERCENT OF CURRENT BILLINGS, WITH THE UNDERSTANDING THAT THERE IS RESERVED TO THE UNITED STATES THE RIGHT TO CANCEL THIS ARRANGEMENT AT ANY TIME IF THE PROTECTION OF THE INTERESTS OF THE UNITED STATES APPEARS TO JUSTIFY OTHER COLLECTION PROCEDURES. ACCORDINGLY, THE 5 PERCENT ARRANGEMENT MAY BE TREATED AS TERMINATED AS OF JANUARY 31, 1956, AND ON AND AFTER FEBRUARY 1, 1956, WE SHALL EXPECT THE U.S.A.C. TRANSPORT, INC., TO PAY MONTHLY THE SUM OF $500, TO BE HELD PENDING THE COMPLETION OF THE ACCELERATED AUDIT.

OUR TRANSPORTATION DIVISION WILL PROCEED WITH THE ACCELERATED AUDIT, BUT YOU NO DOUBT REALIZE THAT SOME TIME NECESSARILY WILL BE REQUIRED TO ASSEMBLE THE NEEDED RECORDS, ALL OF WHICH ARE NOT PRESENTLY ON HAND IN OUR TRANSPORTATION DIVISION. YOUR OFFER OF ASSISTANCE IN THE FORWARDING OF THIS WORK IS APPRECIATED, AND YOU WILL BE CALLED UPON IN APPROPRIATE INSTANCES TO SUPPLY NEEDED INFORMATION TO ENABLE THE SPEEDY COMPLETION OF THE AUDIT.