United States v. American Textile Machine Corp., Civ. No. 1246.
| Citation | 119 F. Supp. 253 |
| Decision Date | 24 December 1953 |
| Docket Number | Civ. No. 1246. |
| Parties | UNITED STATES v. AMERICAN TEXTILE MACHINE CORP. |
| Court | U.S. District Court — Middle District of Tennessee |
James M. Swiggart, Asst. U. S. Atty., Nashville, Tenn., and Julian R. Wilheim, Attorney, Claims Division, Department of Justice, Washington, D. C., for plaintiff.
Judson Harwood and Cecil Sims, Nashville, Tenn., for defendant.
1. Defendant American Textile Machine Corporation (formerly Air Utilities, Inc.) was, at all times material herein, and still is a corporation organized and existing under the laws of the State of Tennessee, having its principal office and place of business at Murfreesboro, Tennessee, and within the jurisdiction of this Court.
2. Defendant was renegotiated, for its fiscal year ended November 30, 1945, by the War Contracts Price Adjustment Board.
3. On October 7, 1948, the War Contracts Price Adjustment Board determined that, for its fiscal year ended November 30, 1945, defendant received excessive profits, within the meaning of the Renegotiation Act, as amended, 50 U.S.C.A.Appendix, § 1191, in the gross principal amount of $800,000 and that, after adjustment on account of taxes, other than Federal taxes, the amount of such excessive profits to be eliminated is $795,418.
4. By registered United States mail letter of October 7, 1948, which was received by defendant in due course, the War Contracts Price Adjustment Board notified defendant of its determination of excessive profits for defendant's fiscal year ended November 30, 1945.
5. By registered United States mail letter of October 21, 1948, which was received by defendant in due course, the War Contracts Price Adjustment Board, acting by and through its duly authorized delegatee, the Treasurer, Reconstruction Finance Corporation, demanded payment by defendant, on or before November 4, 1948, of the excessive profits of $795,418, less the applicable Federal tax credit, if any, as provided in Section 3806 of the Internal Revenue Code.
6. On November 30, 1948, defendant filed a petition in The Tax Court of the United States for de novo redetermination, pursuant to the Renegotiation Act of 1942, as amended, of the excessive profits determined by the War Contracts Price Adjustment Board with respect to its fiscal year ended November 30, 1945, being Docket No. 836-R of that Court.
7. Plaintiff joined issue in Tax Court Docket No. 836-R on October 18, 1949, and such redetermination proceeding has been, at all times material herein, and still is pending in The Tax Court of the United States.
8. With regard to its fiscal year ended November 30, 1945, defendant's Federal tax credit, computed in accordance with Section 3806 of the Internal Revenue Code, amounts to $585,491.34, leaving a net principal determination of excessive profits for such fiscal year, based on the October 7, 1948, determination of the War Contracts Price Adjustment Board, in the sum of $209,926.66.
9. Defendant was renegotiated, for its fiscal year ended November 30, 1946, by the War Contracts Price Adjustment Board.
10. On October 7, 1948, the War Contracts Price Adjustment Board determined that, for its fiscal year ended November 30, 1946, defendant received excessive profits, within the meaning of the Renegotiation Act of 1943, as amended, in the gross principal amount of $300,000.00 and that, after adjustment on account of taxes, other than Federal taxes, the amount of such excessive profits to be eliminated is $300,000.
11. By registered United States mail letter of October 7, 1948, which was received by defendant in due course, the War Contracts Price Adjustment Board notified defendant of its determination of excessive profits for defendant's fiscal year ended November 30, 1946.
12. By registered United States mail letter of November 5, 1948, which was received by defendant in due course, the War Contracts Price Adjustment Board, acting by and through its duly authorized delegatee, the Treasurer, Reconstruction Finance Corporation, demanded payment by defendant, on or before November 30, 1948, of the excessive profits of $300,000, less the applicable Federal tax credit, if any, as provided in Section 3806 of the Internal Revenue Code.
13. On November 30, 1948, defendant filed a petition in The Tax Court of the United States for de novo redetermination, pursuant to the Renegotiation Act of 1942, as amended, of the excessive profits determined by the War Contracts Price Adjustment Board with respect to its fiscal year ended November 30, 1946, being Docket No. 837-R of that Court.
14. Plaintiff joined issue in Tax Court Docket No. 837-R on October 18, 1949, and such redetermination proceeding has been, at all times material herein, and still is pending in The Tax Court of the United States.
15. With regard to its fiscal year ended November 30, 1946, defendant's Federal tax credit, computed in accordance with Section 3806 of the Internal Revenue Code, amounts to $105,495.70, leaving a net principal determination of excessive profits for such fiscal year, based on the October 7, 1948, determination of the War Contracts Price Adjustment Board, in the sum of $194,504.30.
16. On January 16, 1951, defendant submitted a written offer to the Attorney General of the United States to compromise defendant's liability for excessive profits, arising from the determination thereof made by the War Contracts Price Adjustment Board for defendant's fiscal years ending November 30, 1945, and November 30, 1946, on the following basis:
(a) To pay to plaintiff the total amount of $58,000.00, in the following manner:
(1) Upon receipt of acceptance
of such offer
............................... $20,000.00
(2) On the 1st day of
each month from
February 1951 to
July 1951, inclusive
............................... 500.00
(3) On the 1st day of
each month from
August 1951 to December
1951, inclusive
............................... 1,000.00
(4) On January 1
1952 .......................... 30,000.00
(5) With interest on unpaid
balances of the
$58,000.00, payable
at the rate of 6%
per annum, on the
1st day of each
month from February
1951 to January
1952, inclusive
(b) To waive any and all claims of defendant against plaintiff and to execute necessary forms of such waiver as required by plaintiff.
(c) To dismiss defendant's de novo redetermination proceedings, Docket Nos. 836-R and 837-R in The Tax Court of the United States.
(d) To provide the following collateral security for the payments to be made in the total amount of $58,000.00:
(e) If defendant defaults on any terms and conditions of the offer in compromise, the entire balance of plaintiff's renegotiation claim, as determined by the War Contracts Price Adjustment Board, shall become immediately due and payable.
(f) Upon plaintiff's acceptance of the offer in compromise, the summons and complaint against defendant in the United States District Court for the Middle District of Tennessee, Civil Action No. 1246, shall be dismissed, without prejudice.
(g) Upon plaintiff's acceptance of the offer in compromise, the Department of Justice shall request removal of any "stop payment orders" against defendant.
17. Between January 16, 1951, and January 22, 1951, defendant submitted to the Attorney General of the United States the following verbal supplements to its written compromise offer of January 16, 1951:
(a) To give plaintiff a mortgage on the 510 shares of Hold-Stitch Fabric Machine Company stock owned by defendant.
(b) To pay delinquent Federal taxes of, at least, $28,364.03, assessed against defendant by the Nashville, Tennessee, office, Bureau of Internal Revenue.
(c) To convey, or cause to be conveyed, to plaintiff non-exclusive, royalty-free licenses on patents owned by Hold-Stitch Fabric Machine Company.
18. On January 22, 1951, the Attorney General of the United States accepted defendant's offer in compromise of January 16, 1951, as amended by defendant's subsequent verbal supplements thereto, and notified defendant of such acceptance by telegram of January 23, 1951.
19. From January 16, 1951, to the present date, which includes all times material herein, defendant never tendered or delivered to p...
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