Review of GSA Setoff Action Against Carrier

After a motor freight firm declared bankruptcy, it was merged into another firm. The new firm contended that overcharge claims arising prior to the petition in bankruptcy may not be properly set off against the post-petition bills payable by the General Services Administration (GSA) to the bankrupt firm. Under the Bankruptcy Act, the mutuality of debts and credits between the bankrupt and the party claiming the right of setoff must exist when the petition in bankruptcy is filed. Thus, GSA may not satisfy an overcharge claim by setoff against post-petition bills payable to the bankrupt firm. Following the merger of the two corporations, the surviving corporation became liable for any obligations of the bankrupt firm that had been filed prior to the bankruptcy. The new firm did not acquire a legal obligation to pay the bankrupt firm's overcharge claims as a result of their merger, however, if such claims were not filed in bankruptcy. Therefore, GSA should allow the new firm's claim for the post-petition bills payable to the bankrupt firm.