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RLVogel 46-73-1322 Tele: (202) 724-7211
James H. Morgan, Esq.
Re: U.S. ex ref. Ballew v. Aerospatiale Helicopter
Dear Mr. Morgan: This confirms our understanding regarding the tentative settlement reached in this case and the relator's share of the recovery. As we have discussed, on November 2, 1989, representatives of Textron Lycoming and the Civil Division reached a tentative agreement to settle the claims arising out of your client's qui tam suit. Under that agreement, Textron Lycoming would pay the Government $17,000,000, with interest accruing from November 2, 1989, until the date of payment at the rate of 7.81% per year (the Treasury Bill rate in effect as of November 2, 1989). This payment would cover the Coast Guard's False Claims Act and contractual damages to date arising from Textron Lycoming's conduct. In addition, in order to insure that the Government does not continue to suffer damages, Textron Lycoming would be required to offer the Coast Guard free maintenance of a certain number of engines for the immediate future and, eventually, a "Power by the Hour" on favorable terms to the Government. The formal settlement will not be concluded until several events take place -- e.g., obtaining releases from the Coast Guard, Aerospatiale, your client, etc. Also, the settlement will not become effective until the award of the Power by the Hour contract, an event which could take several months. Finally, the final settlement will have to be approved by various authorities within the Department of Justice, Textron Lycoming, and the Coast Guard. As we earlier agreed, I will recommend, subject to final Department of Justice approval, that the relator receive 15% of the cash payment from Textron to the Government. This would amount to $2.55 million, plus 15% of the accrued interest at the time Textron remits payment to the Government. Once again, thank you for your cooperation. If you have any questions regarding these matters, please feel free to call me. Very truly yours, ______ (Signature) ______
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