Reading Room Document

Scope of Treasury Department Purchase Rights With Respect to Financing Initiatives of the U.S. Postal Service

If the Treasury Department has declared its election to purchase a proposed U.S. Postal Service bond issue pursuant to 39 U.S.C. § 2006(a) prior to the proposed date of issuance and is pursuing good-faith negotiations towards such purchase as of such date, the USPS is not free to proceed with issuance of the bonds to other purchasers solely because Treasury has not completed purchase of the bonds within a 15-day period following USPS' initial notice of the proposed issue. If, in the above circumstances, Treasury and the USPS are unable to negotiate mutually agreeable terms for purchase by Treasury within a commercially reasonable period of time following USPS' proposed date for the issuance of its bonds, then the USPS may proceed with the issuance of such bonds to other purchasers. Treasury is not authorized to dictate or control the terms of the USPS offering, but it must be afforded a reasonable opportunity to reach mutually agreeable terms with the USPS when the original terms proposed by the USPS are unacceptable. That reasonable opportunity is not rigidly limited by the 15-day period for declaring an election to purchase. The OLC does not provide release dates for its opinions, so the release date listed is the date on which the opinion was authored. The original opinion is available at www.justice.gov/file/20186/download.

October 10, 1995