B-170829, MAR 14, 1972

B-170829, MAR 14, 1972

TRANSPORTATION - CAPITAL STOCK PURCHASE - LIABILITY FOR OVERCHARGES CONCERNING GAO ACTION IN SETTING OFF AMOUNTS OTHERWISE DUE TEXAS OVERLAND TRUCKING EXPRESS, INC., FOR OVERCHARGES PAID TO DON C. TODD AS SOLE STOCKHOLDER OF TODDMAN TRANSPORT COMPANY. UNDER THE TERMS OF THE SALES AGREEMENT, IT IS CLEAR THAT MR. TODD WOULD BE LIABLE TO THE BUYER FOR OVERCHARGES PAID PRIOR TO THE DATE THAT THE CONTRACT BECAME EFFECTIVE. WHILE TEXAS OVERLAND TRUCKING EXPRESS, INC., D/B/A TODDMAN TRANSPORT COMPANY IS REQUIRED TO PAY THESE AMOUNTS, THE COMP. GEN. IS INVESTIGATING THE POSSIBILITY THAT THE UNITED STATES MAY BE ABLE TO PROCEED AGAINST MR. TODD IN ITS OWN RIGHT TO COLLECT THE SUBJECT OVERCHARGES.

TO TEXAS OVERLAND TRUCKING EXPRESS, INC.:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 27, 1972, TO THE HONORABLE JIM WRIGHT, HOUSE OF REPRESENTATIVES, RELATIVE TO YOUR BILLS FOR TRANSPORTATION SERVICES FURNISHED THE UNITED STATES AND TO THE ACTION OF OUR OFFICE IN SETTING OFF OVERCHARGES FROM AMOUNTS OTHERWISE DUE YOUR COMPANY. CONGRESSMAN WRIGHT REFERRED YOUR LETTER TO US FOR CONSIDERATION.

YOU POINT OUT THAT YOUR CORPORATION, TEXAS OVERLAND TRUCKING EXPRESS, INC., PURCHASED THE CAPITAL STOCK OF TODDMAN TRANSPORT COMPANY FROM DON C. TODD AND THAT AT THE TIME OF THE PURCHASE NO OVERCHARGE CLAIMS OF THE GOVERNMENT WERE LISTED AS LIABILITIES OF TODDMAN.

UNDER PART I, PARAGRAPH (E) OF THE CONTRACT THE SELLER (DON C. TODD) COVENANTED AND AGREED:

"(E) TO ASSUME ALL ASSETS AND LIABILITIES OF THE COMPANY (TODDMAN TRANSPORT CO.) OTHER THAN THOSE LISTED IN PARAGRAPH I (C) ABOVE, AND TO PAY OFF SUCH OTHER LIABILITIES AS THEY MAY EXIST AS THE SAME COME DUE, HOLDING THE PURCHASER (TEXAS OVERLAND TRUCKING EXPRESS, INC.) HARMLESS FROM ANY LIABILITIES THEREFROM."

THERE ARE NO DEBTS OR OVERCHARGES DUE THE UNITED STATES LISTED IN PARAGRAPH I (C); THUS THE SELLER, DON C. TODD, THE SOLE AND ONLY STOCKHOLDER OF TODDMAN TRANSPORT CO., WOULD, UNDER THE TERMS OF SALES CONTRACT, BE LIABLE TO YOU FOR ANY OVERCHARGES WHICH THE UNITED STATES MAY HAVE PAID TO TODDMAN TRANSPORT COMPANY PRIOR TO THE EFFECTIVE DATE OF THE SALE OF THAT COMPANY TO YOU.

THE RECORD SHOWS THAT THE CONTRACT WAS EXECUTED MAY 25, 1971, AND, ALTHOUGH IT IS NOT ENTIRELY CLEAR, IT APPARENTLY WAS CONSUMMATED WITHIN 30 DAYS OF THE EXECUTION. THEREFORE, IT IS OUR VIEW THAT THE SELLER, DON C. TODD, WOULD BE LIABLE TO YOU FOR ANY TRANSPORTATION OVERCHARGES PAID PRIOR TO JUNE 24, 1971, AND THAT TEXAS OVERLAND TRUCKING EXPRESS, INC., D/B/A TODDMAN TRANSPORT CO., WOULD BE LIABLE FOR OVERCHARGES MADE THEREAFTER.

THE LIABILITY OF DON C. TODD TO YOU FOR OVERCHARGES PAID PRIOR TO JUNE 24, 1971, WHICH YOU ARE REQUIRED TO PAY, IS THUS CLEAR; HOWEVER, WE ARE INVESTIGATING THE POSSIBILITY THAT THE UNITED STATES AS CREDITOR OF TODDMAN TRANSPORT CO., MAY BE ABLE TO PROCEED AGAINST THAT FIRM AND DON C. TODD, AS ITS SOLE AND ONLY STOCKHOLDER, TO COLLECT OVERCHARGES PAID PRIOR TO JUNE 24, 1971. TO THAT END WE HAVE INSTRUCTED OUR TRANSPORTATION DIVISION TO DETERMINE THE OVERCHARGES MADE ON BILLS OF TODDMAN TRANSPORT COMPANY PRIOR TO THAT DATE.