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B-192974 1 (1979-03-29)

handle is hein.gao/gaobadhap0001 and id is 1 raw text is: FILE: B-192974 DATE: MAR 2 a 1979 ATTER OF:Yellow Freight System, Inc. IA) E 0 DIGEST: 1. We agree with claimant and GSA that allowable bills payable. to the carrier arising after filing carrier's petition in bankruptcy cannot be used to satisfy Government's pre- petition transportation overcharge claims by setoff. 2. Transportation overcharge claims not filed and proved in bankruptcy are discharged and carrier retains only a moral obligation for repayment of debt after bankruptcy. 3. Where carrier merges with another corporation, successor corporation acquires only outstanding obligations of merged company, and therefore there is no legally enforceable obli- gation on successor to pay pre-petition transportation over- charge claims discharged in bankruptcy. Yellow Freight System, Inc. (Yellow Freight) successor-in-interest to Braswell Motor Freight Lines, Inc. (Braswell) , by letter dated September 18, 1978, requests review of the General Services Administration's (GSA) action in setting off an allowable claim of Braswell's against several transportation overcharge claims against Braswell. Yellow Freight argues that the Government's overcharge claims were barred by the bank- ruptcy of Braswell and that therefore the setoff of $5,141.05 from funds otherwise owed by the Government to Braswell was improper. On December 2, 1976, Braswell filed its petition for 'relief under the provisions of Chapter XI of the Bankruptcy Act. GSA filed a Proof of Claim for transportation overcharges of $1,430.24 on January 28, 1977. On July 20, 1977, the debtor's Plan of Arrangement was confirmed by the bankruptcy court. After confirmation, the Office of Transportation Audits within GSA developed additional transportation overcharges of $7,473.08 by Braswell that arose from freight charges for transportation performed prior to the petition in bankruptcy. In order to satisfy these additional overcharge claims, GSA set off the additional overcharge claims against bills payable to Braswell which arose before and after the petition for relief was filed under the Bankruptcy Act (Certificate of Settlement, dated September 20, 1977). The transportation overcharge claims were set off against $2,147.59 of pre-petition bills payable and against. $5,141.05 of post-petition bills payable to Braswell.

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