B-144031, APR. 27, 1961

B-144031, APR. 27, 1961

TO SHAW, PITTMAN, POTTS AND MAECHLING:

WE HAVE YOUR LETTER OF MARCH 31, 1961, IN REPLY TO OUR LETTER OF MARCH 16, CONCERNING THE CLAIM OF THE AMERICAN SECURITY AND TRUST COMPANY AS ASSIGNEE OF CURLES MOVERS UNDER GBL A0212891.

ON BEHALF OF AMERICAN YOU HAVE SUBMITTED A CLAIM FOR AMOUNTS REMAINING DUE UNDER THE CONTRACT IN THE SUM OF $37,503.74. WE RESERVE THE RIGHT TO DEDUCT FROM THAT AMOUNT WHATEVER SUMS MAY PROPERLY BE SET OFF AGAINST THE ASSIGNOR'S TAX INDEBTEDNESS. WE HAVE WITHHELD PAYMENT BECAUSE OF THE FIRM POSITION OF THE TRUSTEE IN BANKRUPTCY THAT THE ASSIGNMENT CONSTITUTES A VOIDABLE PREFERENCE UNDER THE BANKRUPTCY ACT.

YOU EXPRESS THE VIEW IN YOUR LETTER OF MARCH 31 THAT THE POSITION OF THE TRUSTEE WITH REGARD TO THE VALIDITY OF THE ASSIGNMENT IS ARBITRARY AND IS REFUTABLE BY UNEQUIVOCAL EVIDENCE THAT THE ASSIGNMENT WAS NOT A PREFERENCE. WHETHER THE ASSIGNMENT IS A VOIDABLE PREFERENCE IS OF COURSE PRIMARILY WITHIN THE JURISDICTION OF THE BANKRUPTCY COURT. WITH THIS IN MIND YOU HAVE OFFERED TO FURNISH AN UNDERTAKING FROM THE ASSIGNEE TO HOLD THE UNITED STATES HARMLESS FROM ANY POSSIBILITY OF DOUBLE LIABILITY UNDER THE GBL. IN VIEW OF YOUR SUGGESTION WE WILL BE GLAD TO CONSIDER PAYMENT TO THE ASSIGNEE OF THE AMOUNT WHICH REMAINS DUE UNDER THE CONTRACT AS STATED ABOVE, LESS ANY TAX INDEBTEDNESS OF THE ASSIGNOR WHICH MAY PROPERLY BE SET OFF, UPON RECEIPT OF AN UNDERTAKING EXECUTED BY AN AUTHORIZED OFFICER OF THE AMERICAN SECURITY AND TRUST COMPANY IN A FORM SIMILAR TO THE FOLLOWING:

"KNOW ALL MEN BY THESE PRESENTS THAT THE AMERICAN SECURITY AND TRUST COMPANY, OF WASHINGTON, D.C. (HEREINAFTER CALLED "TRUST COMPANY"), IS HELD AND FIRMLY BOUND UNTO THE UNITED STATES OF AMERICA (HEREINAFTER CALLED "GOVERNMENT") IN THE AMOUNT OF THIRTY-SEVEN THOUSAND FIVE HUNDRED THREE AND 74/100 ($37,503.74) DOLLARS, LESS ANY AMOUNT DETERMINED BY THE GENERAL ACCOUNTING OFFICE TO BE PROPERLY FOR SETOFF AGAINST THE TAX INDEBTEDNESS OF CURLES MOVERS, FOR THE PAYMENT WHEREOF TRUST COMPANY BINDS ITSELF, ITS HEIRS, EXECUTORS, ADMINISTRATORS, SUCCESSORS, AND ASSIGNS, FIRMLY BY THESE PRESENTS.

"WHEREAS, CONTRACT NO. GS-OOT-1265/TOI) WAS ENTERED INTO ON JUNE 17, 1960, BY GOVERNMENT AND CURLES MOVERS FOR THE MOVEMENT OF CERTAIN GOODS AND EQUIPMENT, THE MOVEMENT HAS BEEN SATISFACTORILY COMPLETED AND THE AMOUNT ABOVE-STATED REMAINS DUE UNDER THE TERMS OF THE CONTRACT; AND

"WHEREAS, THE PAYMENTS DUE UNDER THE SAID CONTRACT AND THE GOVERNMENT BILL OF LADING EXECUTED PURSUANT THERETO WERE ASSIGNED BY CURLES MOVERS TO TRUST COMPANY ON JULY 1, 1960; AND

"WHEREAS, CURLES MOVERS WAS ADJUDICATED A BANKRUPT AS OF AUGUST 19, 1960, AND THE TRUSTEE IN BANKRUPTCY CONTENDS THAT SAID ASSIGNMENT IS A VOIDABLE PREFERENCE UNDER THE BANKRUPTCY ACT; AND

"WHEREAS, THE GOVERNMENT IS WILLING TO MAKE PAYMENT TO TRUST COMPANY IN THE AMOUNT, LESS PROPER DEDUCTIONS, AS STATED IN THE FIRST PARAGRAPH ABOVE, UPON RECEIPT OF AN UNDERTAKING BY TRUST COMPANY HOLDING GOVERNMENT HARMLESS FROM ANY LOSS SUSTAINED BY REASON OF PAYMENT OF THESE FUNDS.

"NOW, THEREFORE, AMERICAN SECURITY AND TRUST COMPANY DOES HEREBY UNDERTAKE THAT IT WILL HOLD GOVERNMENT HARMLESS FROM ALL MANNER OF LOSS, COST, AND EXPENSE WHICH IT MAY SUFFER BY REASON OF ..END :