IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

KEVIN BROWN, STEVEN LAMB, 

and CHRIS BERTRAND,

Plaintiffs/Counterclaim 

Defendants,

v. 

COURT SQUARE CAPITAL 

MANAGEMENT, L.P., COURT 

SQUARE CAPITAL GP, LLC, and 

COURT SQUARE CAPITAL GP III, 

LLC,

Defendants/Counterclaim 

Plaintiffs.

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C.A. No. 2021-0262-KSJM

ORDER RESOLVING DISPUTE OVER 

PREJUDGMENT INTEREST

1. On December 15, 2023, the court issued a Post-Trial Memorandum 

Opinion (the “Post-Trial Opinion”). Readers are directed to the Post-Trial Opinion 

for a full account of the court’s findings and holdings.1 By way of summary, Plaintiff 

Kevin Brown was a partner at Court Square Capital Management, L.P., and received 

carried interest in two of Court Square’s funds during his tenure with the company. 

He resigned from Court Square in 2016 to join MSD Capital, and Court Square 

continued making carried interest payments to Brown for years after his resignation. 

Beginning in 2019, however, other employees left Court Square to join MSD. Court 

Square sent letters accusing Brown and the other former employees of breaching non1 2023 WL 8665122 (Del. Ch. Dec. 15, 2023).
2

compete provisions in the LLC agreements that govern their rights to carried 

interest. The letter campaign escalated, Court Square ceased making carried interest 

payments to Brown, and Brown brought this suit to enforce his rights to carried 

interest payments under the LLC agreements. Court Square asserted counterclaims 

for breach of non-compete and confidentiality provisions in the LLC agreements. The 

Post-Trial Opinion found in favor of Brown.

2. The court ordered the parties to confer on a form of final judgment. In 

their meet and confers, the parties agreed that the Post-Trial Opinion required Court 

Square: to repay Brown all carried interest he is owed in the principal amount of 

$5,366,674; to pay Brown all carried interest going forward; to pay prejudgment and 

post-judgment interest; and to calculate interest on a per diem basis for each payment 

of carried interest Court Square improperly withheld based on the floating Federal 

Funds rate. The parties dispute whether prejudgment interest should be simple or 

compound.2 Court Square argues for simple interest. Brown argues for interest 

compounded monthly.

3. Generally, this court has “broad discretion, subject to principles of 

fairness, in fixing the rate to be applied.”3 That includes the “discretion to select a 

2 The parties seem to limit their dispute to prejudgment interest. See C.A. No. 2021-

0262-KSJM Docket (“Dkt.”) 185, Proposed Final Order ¶ 2 (bold language); Dkt. 186 

at 1 (“Court Square respectfully respects that the Court direct that prejudgment 

interest in this matter be computed on a simple, rather than a compound basis.”).

3 Summa Corp. v. Trans World Airlines, Inc., 540 A.2d 403, 409 (Del. 1988) (citations 

omitted); Levey v. Browstone Asset Mgmt., LP, 2014 WL 4290192, at *1 (Del. Ch. Aug. 

29, 2014).
3

rate of interest higher than the statutory rate[,]” including “the lesser authority to 

award compounding.”4 

4. In Delaware, prejudgment interest is awarded as a matter of right and 

computed from the day payment is due.5 “Prejudgment interest serves two 

purposes”—one compensatory and one restitutionary.6 “[F]irst, [prejudgment 

interest] compensates the plaintiff for the loss of the use of his or her money; and, 

4 Gotham P’rs, L.P. v. Hallwood Realty P’rs, L.P., 817 A.2d 160, 173 (Del. 2002) 

(quoting Brandin v. Gottlieb, 2000 WL 1005954, at *29 n.83 (Del. Ch. July 13, 2000)); 

see also Whittington v. Drago Gp. L.L.C., 2011 WL 1457455, at *15 (Del. Ch. Apr. 15, 

2011) (“As part of its discretion to fashion an appropriate remedy, this court has the 

discretion to award either compound or simple interest.” (citing Cede & Co. v. 

Technicolor, Inc., 684 A.2d 289, 301 (Del. 1996)).

5 Moskowitz v. Mayor and Council of Wilm., 391 A.2d 209, 210 (Del. 1978) (“Interest 

is awarded in Delaware as a matter of right and not of judicial discretion. As a general 

rule, interest accumulates from the date payment was due [to] the plaintiff, because 

full compensation requires an allowance for the detention of the compensation 

awarded and interest is used as a basis for measuring that allowance.” (citations 

omitted)). 

6 Brandywine Smyrna, Inc. v. Millennium Builders, LLC, 34 A.3d 482, 486 (Del. 2011) 

(citation omitted); see also Browstone Asset Mgmt., 2014 WL 4290192, at *1 (“An 

award of interest serves two purposes. It compensates the [judgment creditor] for the 

loss of use of its capital during the pendency of the [proceeding] and causes the 

disgorgement of the benefit [the judgment debtor] has enjoyed during the same 

period.” (alterations in original) (quoting Gholl v. eMachines, Inc., 2004 WL 2847865, 

at *8 (Del. Ch. Nov. 24, 2004))); Wacht v. Cont’l Hosts, Ltd., 1994 WL 728836, at *2 

(Del. Ch. Dec. 23, 1994) (finding prejudgment interest serves two purposes: “First, it 

compensates the plaintiff for the loss of use of his money during the time spent to 

recover it[,] and “[s]econd, awarding interest to a plaintiff forces defendants to 

disgorge the benefit they obtained from having the use of plaintiff’s funds as a result 

of defendants’ wrongful conduct.” (citing Trans World Airlines, Inc. v. Summa Corp., 

1987 WL 5778, at *1, *4 (Del. Ch. Jan. 21, 1987), aff’d, 540 A.2d 403 (Del. 1988))).
4

second, it forces the defendant to relinquish any benefit that it has received by 

retaining the plaintiff’s money in the interim.”7 

5. Historically, Delaware courts “disfavored the practice of compounding 

interest.”8 Delaware’s legal rate of interest, set forth in 6 Del. C. § 2301(a), has been 

interpreted as providing for simple interest only.9 This historical practice, however, 

is problematic because market realities mean “even the most unsophisticated” of 

litigants are “easily capable of earning compound interest” through “commercial 

lending and savings institutions.”10 Compound interest is thus necessary to fully 

compensate a plaintiff and disgorge undue profits from a defendant.

6. Recognizing the problems with the historical approach, the Court of 

Chancery broke away from it in 2000 in Brandin v. Gottlieb.11 There, the court found 

in favor of the plaintiff on her contractual claims against her former business

partner.12 In setting the interest, the court found that “fairness dictates that the prejudgment interest awarded . . . be compounded.”13 The court based this decision on

7 Brandywine Smyrna, 34 A.3d at 486.

8 Trans World Airlines, 540 A.2d at 410.

9 See, e.g., Rehoboth Marketplace Assocs. v. State, 625 A.2d 279, 1993 WL 191465, at 

*1 (Del. Apr. 26, 1993) (TABLE) (“[c]ompound interest on awards is not permitted 

under Delaware law” (citing Weinberger v. UOP, Inc., 517 A.2d 653, 657 (Del. Ch. 

1986))).

10 Smith v. Nu-West Indus., 2001 WL 50206, at *1 (Del. Ch. Jan. 12, 2001) (citing

Onti, Inc. v. Integra Bank, 751 A.2d 904, 926–29 (Del. Ch. 1999)).

11 2000 WL 1005954 (Del. Ch. July 13, 2000).

12 Id. at *29.

13 Id.
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“market realities” concerning compound interest, including the plaintiff’s “financial 

sophistication” and “the probability that [the defendant] earned more than the legal 

rate of interest on the moneys he owe[d].”14 

7. In reaching this outcome, the court recognized its broad discretion in 

fixing the rate of interest, subject to fairness.15 The court also recognized that the 

historical approach might warrant denying compound interest in the case of legal 

claims. The court observed that: “[I]t makes sense for the Court of Chancery to apply 

the statutory rate [and award simple interest] where the damage case before it is 

identical to a claim that could have been brought in Superior Court were there no 

need for this court to decide other equitable issues.”16 The court further stated that,

although it had resolved the dispute on contract grounds, the parties had a fiduciary 

relationship and the court could have decided the action on equitable grounds.17 The 

court thus found compound interest appropriate.

8. The Delaware Supreme Court expressly endorsed the rule of Brandin in 

2002 in Gotham Partners, L.P. v. Hallwood Realty Partners, L.P.18 The issue on 

appeal was whether the “Court of Chancery erred by awarding compound interest on 

14 Id. 

15 Id.

16 Id.

17 Id.

18 817 A.2d 160 (Del. 2002).
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a damages award[.]”19 The appellees had argued that the “Court of Chancery may 

not award compound interest as a matter of law.”20 

9. The high court agreed that “Delaware courts have traditionally 

disfavored compound interest.”21 But the court held: “[W]e agree with the Court of 

Chancery that its uncontested ‘discretion to select a rate of interest higher than the 

statutory rate . . . includ[es] the lesser authority to award compounding.’”22 The court 

reasoned that “[t]he rule or practice of awarding simple interest, in this day and age, 

has nothing to commend it—except that it has always been done that way in the 

past.”23 

10. Although the reasoning of Gotham criticized simple interest generally, 

the holding affirmed only the Court of Chancery’s ability to deviate from the historical 

approach. Consequently, for the last few decades, the Court of Chancery has awarded

19 Id. at 173 (formatting altered).

20 Id.

21 Id. (citation omitted). 

22 Id. (second alteration in original) (quoting Brandin, 2000 WL 1005954, at *29 n.83).

23 Id. (alteration in original) (quoting Onti, 751 A.2d at 929).
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compound interest as a matter of practice.24 The Superior Court, meanwhile, has 

remained faithful to the historical approach.25 

11. Judge Clark recently addressed this issue in LCT Capital, LLC v. NGL 

Energy Partners LP.26 In a scholarly analysis, Judge Clark concluded that the 

Superior Court does not have the discretion, unlike the Court of Chancery, to deviate 

from awarding simple interest.27 In reaching this conclusion, Judge Clark stated 

24 See generally Donald J. Wolfe, Jr. & Michael A. Pittenger, Corporate and 

Commercial Practice in the Delaware Court of Chancery § 16.09[f][1] (2022)

(recognizing that “the Court of Chancery now has shed much of its traditional 

reluctance about awarding compound interest and will grant such an award in 

appropriate cases, determining whether such an award is appropriate based on the 

parties’ sophistication, the realities of the financial market, and common sense”

(collecting cases)).

25 See, e.g., LCT Cap., LLC v. NGL Energy P’rs LP, 2023 WL 4102666, at *5–9 (Del. 

Ch. June 20, 2023); Balooshi v. GVP Glob. Corp., 2022 WL 576819, at *14 (Del. Super. 

Feb. 25, 2022), aff’d, 285 A.3d 839 (Del. 2022) (TABLE); Pro. Investigating & 

Consulting Agency, Inc. v. Hewlett-Packard Co., 2015 WL 1417329, at *11 (Del. Super. 

Mar. 23, 2015).

26 2023 WL 4102666.

27 Id. at *5–9. In reaching this conclusion, Judge Clark looked at three Delaware 

Supreme Court decisions— Trans World Airlines, Stone, and Rehoboth Marketplace. 

Id. at *7 (discussing Trans World Airlines, 540 A.2d 403; Stone & Co., Inc. v. 

Silverstein, C.A. No. 298, 1998 (Del. Apr. 1, 1999) (ORDER); Rehoboth Marketplace 

Assocs., 1993 WL 191465). Trans World Airlines and Stone held that the Court of 

Chancery retained the discretion to award compound interest. Id. (citing Trans 

World Airlines, 540 A.2d at 410; Stone, No. 298, 1998 ¶ 20). Rehoboth Marketplace

held, in an abbreviated discussion, that the Superior Court did not have that 

discretion. Id. (citing Rehoboth Marketplace Assocs., 1993 WL 191465, at *1 

(“Compound interest on awards is not permitted under Delaware law.” (citations 

omitted))). The Rehoboth court did not explain its rationale but cited to this court’s 

decision in Weinberger v. UOP, Inc., which merely stated the historical approach of 

“providing only simple interest.” 517 A.2d 653, 657 (Del. Ch. 1986) (citing Papendick 

v. Robert Bosch GmbH, 1981 WL 291739, at *4 (Del. Super. Aug. 4, 1981), aff’d, 450 

A.2d 894 (Del. 1982) (TABLE)). The Weinberger court relied on the Superior Court’s 

decision in Papendick v. Robert Bosch GmbH, which in turn relied on the Superior 
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that “[t]here may be excellent arguments and a trend, based upon commercial 

expectations, to make compound interest the default,” but, under extant law, he 

lacked the discretion to do so.28

12. As it stands, therefore, the Court of Chancery can award compound 

interest, but the Superior Court cannot.29 This split provides an incentive for 

plaintiffs to artfully plead a basis for filing their otherwise legal claims in this court,

as Vice Chancellor Zurn observed in Ainslie v. Cantor Fitzgerald LP.30 To neutralize 

this incentive, Vice Chancellor Zurn denied compound interest in Ainslie. In line with 

the equitable/legal distinction of Brandin, she concluded that where a plaintiff filed

a claim in this court for breach of contract seeking relief that is available in the 

Superior Court, this court should follow the “norm” of the Superior Court, which is 

simple interest.31

Court’s decision in Rollins Environmental Services, Inc. v. WSMW Industries, Inc., 

where the Superior Court noted its past preference for awarding simple interest, and 

then found that awarding compound interest functioned as an end-run around the 

statutory interest rate, and therefore would need the consent of the legislature. 1981 

WL 3297, at *1 (Del. Super. Mar. 6, 1981) (citing Martin v. The Star Publ’g Co., 107 

A.2d 795 (Del. Super. 1954)).

28 2023 WL 4102666, at *8 (citing Brandin, 2000 WL 1005954, at *28).

29 The LCT Capital court noted that there was at least one deviation from the 

Superior Court’s practice of awarding simple interest. Id. (citing Fortis Advisors, LLC 

v. Dematic Corp., 2023 WL 2967781, at *2 (Del. Super. Apr. 13, 2023)).

30 2023 WL 2784802, at *2 (Del. Ch. Apr. 5, 2023).

31 Id. 
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13. Court Square invokes Ainslie to urge the court to enter an award of 

simple interest.32 Brown argues that compound interest is fair and appropriate and 

distinguishes Ainslie on two grounds. First, drawing on the equitable/legal 

distinction of Brandin, Brown sought equitable relief in the form of specific 

performance of his carried interest rights. Second, the LLC agreements at issue

included forum provisions stipulating to the exclusive jurisdiction of this court.33 

14. The equitable/legal distinction does not clearly favor Brown. It is 

accurate to say that Brown sought specific performance. But because Brown sought 

money damages, the utility of his claim for specific performance was arguably limited 

to his request for prospective relief under the LLC agreements. The damages award 

for Brown’s past-due payments were arguably substitutionary and legal in nature.34 

Because Brown does not earn prejudgment interest on prospective relief, the 

equitable aspect of Brown’s claim could be viewed as irrelevant to the award of 

prejudgment interest. 

15. The second distinction that Brown draws is more persuasive. Although 

parties cannot confer jurisdiction on this court through agreement,35 their attempt to 

32 Dkt. 186 at 2 (Court Square Ltr.).

33 Dkt. 185 at 4–5 (Brown Ltr.).

34 I oversimplify a complicated issue. Where the requested relief is a payment of 

money, prospective or retrospective, drawing the equitable/legal distinction can be 

tricky. See generally Colleen P. Murphy, Money as a “Specific” Remedy, 58 Ala. L. 

Rev. 119 (2006). This issue presents quite the rabbit hole, but one that is easily 

sidestepped here because I find in Brown’s favor on other grounds.

35 El Paso Nat. Gas Co. v. TransAmerican Nat. Gas Corp., 669 A.2d 36, 39 (Del. 1995) 

(“It is a cardinal principle of the law that jurisdiction of a court over the subject matter 
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do so here reflects that Brown and Court Square intended that the norms of this court 

would govern their dispute. Also, interpreting the parties’ forum selection to apply 

to this court’s approach to interest is consistent with the composition of the litigants—

an investment firm and its former partner. This court has rightly observed that “even 

the most unsophisticated” of litigants are “easily capable of earning compound 

interest” through “commercial lending and savings institutions[.]”36 The 

sophisticated nature of the parties to this litigation makes this point even stronger. 

There is no doubt that Court Square has earned the equivalent of compound interest 

on the sum it owes to Brown, which Brown—Court Square’s former partner—could

have earned if his carried interest had not been wrongfully withheld.37 Simple 

interest would, therefore, unjustly deprive Brown and reward Court Square. 

Compensatory and restitutionary concerns thus call for compound interest. 

16. Were an award of simple interest not manifestly unfair to Brown, policy 

considerations concerning forum shopping might warrant that result.38 But simple 

interest would be unfair. And there are good grounds to distinguish this case from 

actions like Ainslie awarding simple interest.

cannot be conferred by consent or agreement.” (quoting Timmons v. Cropper, 172 A.2d 

757, 760 (Del. Ch. 1961))).

36 Nu-West Indus., 2001 WL 50206, at *1 (citing Onti, Inc., 751 A.2d at 926–29).

37 See Brandin, 2000 WL 1005954, at *28 (noting the plaintiff’s “financial 

sophistication” and “the probability that [the defendant] earned more than the legal 

rate of interest on the moneys he owe[d]” as reasons for awarding compound interest).

38 Clarity from the Delaware Supreme Court concerning whether the Superior Court 

has the discretion to award compound interest would also address forum shopping 

concerns.
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17. For these reasons, Brown is awarded compound interest. The court has 

discretion to select a compounding interval, which will be quarterly.39 Brown shall 

submit a form of final judgment consistent with this decision and with the 

agreements reached through the parties’ meet and confers. 

/s/ Kathaleen St. J. McCormick 

Chancellor Kathaleen St. J. McCormick

Dated: April 17, 2024

39 Brown requested a monthly interval, and I am open to the possibility that there 

are good arguments for that position. But the recent practice of this court in cases 

like this has been to compound quarterly. See, e.g., Murphy Marine Servs. of Del., 

Inc. v. GT USA Wilm., LLC, 2022 WL 4296495, at *24 (Del. Ch. Sept. 19, 2022) 

(“When the court ‘award[s] the legal rate of interest, the appropriate compounding 

rate is quarterly.’” (alteration in original) (quoting Doft & Co. v. Travelocity.com Inc., 

2004 WL 1152338, at *12 (Del. Ch. May 20, 2004))); see also Wolfe & Pittenger, supra,

§ 16.09[f][1] n.183 (collecting cases). And Brown does not present any good 

arguments for deviating from that practice. See Dkt. 185 at 4 (inaccurately describing

monthly compounding as the court’s default, citing to select cases issued between 

1997 and 2005). His request for a monthly interval is denied.