Compound Interest Granted On Attorneys’ Fees

Not uncommonly, the Court of Chancery will award attorneys’ fees to a party in connection with the successful prosecution of a motion to compel, if the opposing party is found to be acting in bad faith, if the underlying contract specifies that the prevailing party is to receive attorneys’ fees, and in other scenarios.

In the case of ReCor Medical, Inc. v. Warnking, C.A. No. 7387-VCN (Jan. 30, 2015), the Court of Chancery granted attorneys’ fees to the prevailing party for an appeal taken by Defendants.  The parties disputed whether the post-judgment interest on such award of attorneys’ fees should be simple or compound.

The Court stated that it has “‘broad discretion, subject to the principles of fairness,’ in awarding interest.” Slip Op. at 2.  The Court found that awarding simple interest would provide the obligor with an incentive to delay payment.  The Court found that in the interests of equity, post-judgment interest should be compounded quarterly.