Opinion ID: 152730
Heading Depth: 2
Heading Rank: 3

Heading: The Trust's Payments on the Colleges' Allowed Claims

Text: In July 2007, after evaluating this Court's decision in the NYC Appeal, the Trust determined that it should no longer withhold payment of the Colleges' Allowed Claims and paid the Colleges. The payments did not include judgment-rate interest on the Allowed Claims. Instead, to calculate the amount paid to the Colleges, the Trust used the same formula that had been used, per agreements, to determine the amount paid to the City of New York and other PD claimants on their allowed claims. Accordingly, the Trust sent payments to the Colleges in amounts that were based upon the total allowed costs determined for each claim, subject to the payment percentage, plus an additional amount calculated pursuant to a formula that factors into account the rate of return earned by the Trust on its investment portfolio during the time that the Colleges' Allowed Claims were under judicial review. The Trust then moved to dismiss the adversary proceedings against the Colleges on the basis that the issues had been resolved by the payments on the Colleges' Allowed Claims. The Trust reasoned that its payments were in full satisfaction of the Colleges' Allowed Claims. The Colleges opposed dismissal, asserting that they were entitled to judgment-rate interest on their Allowed Claims pursuant to 28 U.S.C. § 1961 rather than the rate of return on the Trust's investment. 28 U.S.C. § 1961 provides that [i]interest shall be allowed on any money judgment in a civil case recovered in a district ... at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date of judgment. 28 U.S.C. § 1961. According to the Colleges, application of judgment-rate interest would require an additional payment from the Trust slightly exceeding $100,000. The bankruptcy court interpreted the Plan Documents and determined that the Colleges were not entitled to judgment-rate interest on their claims. Order on Motion for Dismissal with Prejudice, Adv. No. 02-522, 6-10 (Bankr.M.D.Fla. March 31, 2008) (Bankruptcy Court Dismissal Order). The bankruptcy court therefore granted the Trust's motion to dismiss and denied the College's request for additional payment. Id. at 14-16. The district court affirmed the bankruptcy court's order of dismissal. Claremont McKenna College v. Asbestos Settlement Trust ( In re Celotex Corp. ), No. 08-2343 (M.D.Fla. March 18, 2009) (District Court Dismissal Order). The Colleges appeal to this Court, which has jurisdiction pursuant to 28 U.S.C. § 1291.