B-138747, MAR. 21, 1961
Highlights
GEORGE BERKOWITZ: REFERENCE IS MADE TO YOUR LETTER OF MARCH 3. WE SET FORTH VARIOUS REASONS WHY WE BELIEVED THAT THE INTERESTS OF THE UNITED STATES ARE BEST SERVED BY ADHERENCE TO THE VIEW THAT OUR SETOFF OF FUNDS DUE CENTRAL AIR TRANSPORT IN LIQUIDATION OF THE INDEBTEDNESS OF VIKING AIR LINES WAS JUSTIFIED. THE BASIS OF THE REASONS GIVEN WE CONCLUDED THAT THE HISTORY AND DEVELOPMENT OF THE OPERATIONS BETWEEN THE TWO CORPORATIONS SHOW THAT THERE WAS SUCH A CONTINUITY OF AIR CARRIER OPERATION BEGUN BY VIKING AND CARRIED ON BY CENTRAL AS TO CONSTITUTE THEM A SINGLE ENTITY FOR THE PURPOSE OF DEBT ADJUSTMENT. IT WAS DISCLOSED THAT CENTRAL AIR TRANSPORT HAD NO CASH AND NO PAID EMPLOYEES. IT WAS ALSO SHOWN THAT VIKING AIR LINES WAS PAYING CENTRAL'S OFFICE RENT AT LOCKHEEDAIR TERMINAL.
B-138747, MAR. 21, 1961
TO MR. GEORGE BERKOWITZ:
REFERENCE IS MADE TO YOUR LETTER OF MARCH 3, 1961, RELATIVE TO DEDUCTIONS MADE FROM THE ACCOUNTS OF YOUR CLIENT, CENTRAL AIR TRANSPORT, IN PAYMENT OF A DEBT DUE THE UNITED STATES FROM VIKING AIR LINES.
IN OUR LETTER OF AUGUST 30, 1960, TO YOU, WE SET FORTH VARIOUS REASONS WHY WE BELIEVED THAT THE INTERESTS OF THE UNITED STATES ARE BEST SERVED BY ADHERENCE TO THE VIEW THAT OUR SETOFF OF FUNDS DUE CENTRAL AIR TRANSPORT IN LIQUIDATION OF THE INDEBTEDNESS OF VIKING AIR LINES WAS JUSTIFIED. THE BASIS OF THE REASONS GIVEN WE CONCLUDED THAT THE HISTORY AND DEVELOPMENT OF THE OPERATIONS BETWEEN THE TWO CORPORATIONS SHOW THAT THERE WAS SUCH A CONTINUITY OF AIR CARRIER OPERATION BEGUN BY VIKING AND CARRIED ON BY CENTRAL AS TO CONSTITUTE THEM A SINGLE ENTITY FOR THE PURPOSE OF DEBT ADJUSTMENT.
DURING THE HEARING BEFORE THE CIVIL AERONAUTICS BOARD IN IRREGULAR AIR CARRIER INVESTIGATION, DOCKET 5132 ET AL., IT WAS DISCLOSED THAT CENTRAL AIR TRANSPORT HAD NO CASH AND NO PAID EMPLOYEES. IT WAS ALSO SHOWN THAT VIKING AIR LINES WAS PAYING CENTRAL'S OFFICE RENT AT LOCKHEEDAIR TERMINAL. CENTRAL AIR TRANSPORT AT THAT TIME CONTEMPLATED SUBLEASING AN AIRCRAFT FROM VIKING AND OPERATION OF SAME WITH VIKING CREWS.
IN YOUR LETTER OF SEPTEMBER 1, 1960, TO OUR OFFICE, YOU REFERRED TO APPROVAL BY THE CIVIL AERONAUTICS BOARD OF AN INTERLOCKING RELATIONSHIP BETWEEN CENTRAL AND VIKING. WE WOULD BE INTERESTED IN THE CITATION TO THE SOURCE OF THIS INFORMATION AND THE PERIOD OF TIME INVOLVED. REFERENCE TO SPECIFIC PAGES OF ANY PARTICULAR REPORTS WOULD BE HELPFUL. WE WOULD ALSO BE INTERESTED IN A REFERENCE TO THE SPECIFIC PROCEEDING WHEREIN VIKING WAS AUTHORIZED TO OPERATE AS A PART 42 CARRIER. IF THE REPORTS CONCERNING THE PROCEEDINGS INVOLVED CONTAIN INFORMATION WHICH SERVES TO CONTRADICT THE RECORDS OF OTHER PROCEEDINGS OF THE CIVIL AERONAUTICS BOARD ON WHICH WE HAVE RELIED IN ARRIVING AT OUR DETERMINATION OF CENTRAL'S LIABILITY FOR VIKING'S DEBT, WE WILL GIVE SUCH INFORMATION SERIOUS CONSIDERATION IN FURTHER REVIEW OF THE MATTER. IN THE MEANTIME, WE REAFFIRM OUR VIEW THAT OUR SETOFF ACTION WAS PROPER ON THE BASIS OF THE AVAILABLE RECORD.