Opinion ID: 675767
Heading Depth: 2
Heading Rank: 3

Heading: Calculating the Award

Text: 16 Having determined that National Gypsum is entitled to an award of prejudgment interest, we offer the following to the district court on remand as guidance in calculating that award. First, in keeping with the general rule, the district court should calculate the interest from the date of the accident, see Central Rivers Towing, 750 F.2d at 574, which in this case was 1979. As far as the rate at which interest should be calculated, we recognize that such a determination is traditionally left to the district court's discretion. Id. But we have said on previous occasions that the best starting point is to award interest at the market rate, which means an average of the prime rate for the years in question. See Amoco Cadiz, 954 F.2d at 1332; accord Gorenstein Enterprises, Inc. v. Quality Care-USA, Inc., 874 F.2d 431, 436-37 (7th Cir.1988); Central Rivers Towing, 750 F.2d at 574. In addition, the district court may also want to consider the City's status as a municipality, not as basis to deny prejudgment interest altogether, but as a guide to setting the interest rate. As pointed out by Amoco Cadiz and Gorenstein, one of the factors used in determining the rate of prejudgment interest is the creditworthiness of the judgment debtor. Thus, the district court could, in its discretion, set the rate of interest to match that which lenders would charge the City for short-term, unsecured loans. See Amoco Cadiz, 954 F.2d at 1332; Gorenstein, 874 F.2d at 436. As to whether to award compound interest, we conclude that that, too, is a determination better left to the discretion of the district court. See Transorient Navigators Co., S.A. v. M/S SOUTHWIND, 788 F.2d 288, 293 (5th Cir.1986). Finally, in calculating its eventual award, we ask the district court to memorialize its reasoning in order to assist us in the event of future review.