COURT OF CHANCERY OF THE STATE OF DELAWARE M ORGAN T

. Z URN V ICE C HANCELLOR L EONARD L. W ILLIAMS J USTICE C ENTER 500 N. K ING S TREET , S UITE 11400 W ILMINGTON , D ELAWARE 19801

- 3734 April 5, 2023

Blake A. Bennett
, Esquire C ooch and T aylor P.A

. The Nemou rs Building 1007 North Orange Street
, Suite 1 120 Wilmington, DE 198 01 C. Barr Flinn , Esquire Young Conaway Stargatt & Taylor , LLP Rodney Square 1000 North King Street Wilmington, DE 19801

RE : Brad Ainslie et al v. Cantor Fitzgerald LP , Civil Action N o. 9436

- VCZ

De ar Counsel :

I write to address plaintiffs Brad Ainslie, Jason Boyer, Christophe Cornaire,
John Kirley, Angelina Kwan, and Remy Servant ’ s (collectively, “Plaintiffs”)
Motion for Entry of an Order and Final Judgment, on which the parties have j oined
issue on the prejudgment interest to be awarded to Plain tiffs in this matter. 1 In
particular, the parties dispute whether prejudgment interest should be compound or
simple, and whether prejudgment interest should accrue throughout the full
pende ncy of this litigation or if limited tolling is warranted . I write for the parties,
and refer anyone seeking background on this matter to my January 4, 2023 opinion
on the parties’ cross

- motions for summary judgment. 2

1 Docket Item (“ D.I.”) 144.

2 Ainslie v. Cantor Fitzgerald, LP , 2023 WL 106924 (Del. Ch. Jan. 4, 2023).Brad Ainslie et al v. Cantor Fitzgerald LP
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Plaintiffs seek interest compounded quarterly ; defendant Cantor Fitzgerald

LP seeks simple interest. Plai nti ffs seek interest since the day of D efendant’s

breach; De fendant seeks an equitable pause for periods during which Plaintiffs

failed to advance this matter.
Legal interest is available as of right, and the rate is fixed by statute

. 3 “ In

the absence of an express contract rate, Delaware courts use the ‘ legal rate ’ a s the

default rate. ” 4 B ut the Court maintains the discretion to adjust t he rate, to award
compound or simple interest, and to reduce the amount recoverable as equity
requires, including due to a plaintiff ’ s delay. 5
The Superior Court disfavors compound interest absent special
circumstances; in keeping with that preference, t his Court awards simple interest
when the claim is a legal claim that could be brought in our sister court of law. 6

3 Beard Research, Inc. v. Kates , 8 A.3d 573, 620 (Del. Ch. 2010); 6 D el. C. § 2301

. 4 Kates , 8 A.3d at 620.

5 Wright v. Phillips , 2020 WL 3410544, at *1 (Del. Ch. June 22, 2020); Williams Cos., Inc. v. Energy Transfer LP , 2022 WL 3650176, at *6 (Del. Ch. Aug. 25, 2022) (“[T]his Court has the discretion, in the absence of a provision to the contrary, to award either compound or simple prejudg ment interest.”); In re S. Per u Copper Corp. S’holder Deriv. Litig. , 52 A.3d 761, 816 (Del. Ch. 2011) (awarding simple interest instead of compound in light of the plaintiff’s delays and the other components of the equitable remedy)

. 6 O’Riley v. Rogers
, 2013 WL 4506971, at *1 (Del. Super. Aug. 14, 2013) (citing D avid L. Finger & Louis J. Finger, Delaware Trial Handbook § 28.10 ); Branin v. Stein Roe Inv

. Counsel, LLC , 2015 WL 4710321, at *8 (Del. Ch. July 31, 2015) ( quoting Brandin v.Brad Ainslie et al v. Cantor Fitzgerald LP
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More broadly, this Court endeavors to award interest that will “compensate
plaintiffs fo r losses suffered from the inability to use the mo n ey awarded during
the time it was not available,” 7 and to “require the respondent to disgorge any
[improper] benefit it received.” 8
I begin with the observation that this is a breach of contract case seeking
damages and declaratory judgments, all of which are available in the Superior
Court where simple interest is the norm. That this Court has statutory subject
matter jurisdiction du e to the type of contract at issue, a Delaware partnership
agreement, does not make Plaintiff s ’ loss suffered or the benefi t improperly
enjoyed by D efendant any greater. 9 Simple interest is adequate here.

From there, I consider D efenda nt’s request to reduce the amount of interest

because of P laintiffs’ delay in prosecuting this action. “[T]his Court has the

Gottlieb , 2000 WL 1005954, at *29 (Del. Ch. July 1 3, 2000) (exp laining that the statutory rate should apply to legal claims ) ; Gottlieb
, 2000 WL 1005954, at *29 ( “As a general matter, it makes sense for the C ourt of Chancery to apply the statutory rate where the damage case before it is identical to a clai m that could have been brought in Superior Court were there no need for this court to decide othe r equitable issues.” ).

7 Underbrink v. Warrior Energy Servs. Corp.
, 2008 WL 2262316, at *19 (Del. Ch. May 30, 2008) (inte rnal quotation mar ks omitted) (qu oting Trans World Airlines, Inc. v. Summa Corp.
, 1987 WL 5778 (Jan. 21, 1987) ).

8 In re Mobilactive Media, LL C
, 2013 WL 297950, at *27 (Del. Ch. Jan. 25, 2013) (i nte rnal quotation marks om itted) (quoting Ramunno v. Capano , 2006 WL 1830080, at *1 (Del. Ch. June 23, 2006 )
, aff ’ d , 922 A.2d 415 (Del. 2007) (TABLE) )

.Brad Ainslie et al v. Cantor Fitzgerald LP
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discretion to r e duce prejudgment interest for ‘ delay that is the fault ’ or

‘ responsibility ’ of a plaintiff or his attorney, [whic h] reduction is typically reserved
for situations involving ‘ inordinate ’ or deliberate delay.” 10

P laintiffs or their counsel are at fault fo r inordinate delay in this matter,

which was filed more than nine years ago. In particular, I attribute the following
perio ds of inordinate delay to P laintiffs or their counsel: ( i ) from the deposition of

D efendant’s Head of Partnership on July 12, 2017
, 11 to P laintiffs’ service of new
discovery requests on April 27, 2018
, 12 and ( ii ) from D efendant’s response to a
deposition notice on May 28, 2019
, to the parties’ response to a status update from

the Court on August 10, 2020

. 13 While P laintiffs seek to excus e th ese delays based
on their counsel’s filing for bankruptcy and effort s to retain new counsel, those
problems re main at Plaintiff s ’ feet. Interest shal l be tolled during these periods.

9 D.I. 3 1 ¶ 14 (citing 6 Del. C. § 17

- 111 as the basis for subject matter jurisdiction ).

10 Williams Co s

. , 2022 WL 3650176, at * 7 (footnote omitted) ( first qu oting Bishop v. Progressive Direct Ins. Co. , 2 019 WL 2009331, at *5 (Del. Super. May 3, 2019) ; then quo ting Moskowitz v. Mayor & Council of Wilm

. , 391 A.2d 209, 211 (Del. 1978) ).

11 D.I. 52

. 12 D.I. 61

. 13 D.I. 74; D.I. 75.Brad Ainslie et al v. Cantor Fitzgerald LP
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Defendant also ask s that inter est be reduced for the following dela y s: (i)

from Defendant filing its answer on May 1 2, 20 14
, 14 t o Plaintiffs serv ing discovery

requests on S ep tember 9, 2014
, 15 and (ii) from the entry of a consolidation order on

June 10, 2016
, 16 to Plaintiff s fil ing a consolidated complaint on October 4, 2016

. 17

While not re flective of a diligent approach to t his litigation, t hese delays are no t

inordinate. F inally
, Defendant poin t s to 176 days in which “the parties chose to
pause discovery . . . while discussing the possibility of settlement

. ” 18 This delay is

not solely attributable to Plaintif fs or their counsel

. Interest shall not be tolled
during these periods.

I ask counsel to confer with their calculators and submit a stipulated
proposed order. IT IS SO ORDERED.

Since r ely,

/s/ Morgan T. Z

urn

MTZ/m s Vice Ch an cellor

cc : All Coun sel of Record, v ia Fi l e & S e rve Xpress

14 D.I. 9

. 15 D.I. 11.

16 D.I. 30.

17 D.I. 31.

18 D.I. 145 at 4 ( cita tio n s omitt ed).