Chancery Orders Defendant to Pay Simple Prejudgment Interest and Reduces the Amount Because of Plaintiffs’ Delays
Ainslie v. Cantor Fitzgerald LP, C.A. No. 9436-VCZ (Del. Ch. Apr. 5, 2023)
Delaware law provides for the interest to be awarded under 6 Del. C. § 2301 in actions seeking compensatory damages, and the rate is fixed by the statute. The Court of Chancery has discretion, however, to adjust the rate and form of interest “as equity requires.” In this case, the Court awards Plaintiffs simple interest and reduces the amount because of the Plaintiffs’ inordinate delays in prosecuting the case.
This case involved a breach of contract claim seeking damages and declaratory judgments, which are also available in Delaware’s Superior Court, where simple interest is considered the norm. The Court of Chancery reasoned that it will usually award simple interest when the claim could be brought in the Superior Court. Thus, the Court awarded simple interest and denied Plaintiffs’ claim for compound interest. The Court also reduced the amount of the interest because of Plaintiffs’ several delays in prosecuting the case. Importantly, the interest was only reduced in connection with specific periods involving excessive and usual delays. Additionally, the Court denied tolling in connection with the delay related to the pause of discovery during the settlement negotiations, as that delay was not solely attributable to Plaintiffs or their counsel.Share