Court Opinion

ID: 8912417
Source: CourtListenerOpinion
Date Created: 2022-11-27 03:33:21.546692+00
Date Added: 2024-06-11T17:08:39.151472
License: Public Domain

FLETCHER, Circuit Judge,
dissenting:
I respectfully dissent. The central problem presented by this appeal is the task of determining what is needed to put disfavored creditors on an equal footing with favored creditors. The favored creditors were timely paid and were able to reinvest at market rates higher than the legal rate. The disfavored parties were denied the opportunity for investment at the market rate. The appellants have been disadvantaged by the use of the legal rate. A rate of return approximating the market rate should have been used to achieve equality.
The majority argues that giving appellants the benefit of their bargain would result in unratable distribution among disfavored creditors, because different contract rates apply to different claims. But a decision giving disfavored creditors the approximate market rate would not be based on contract, but rather on the equitable principle of according disfavored creditors equal treatment with favored creditors. Thus, a decision for appellants would not entail awarding the specific contract rates specified in each instrument, but rather would involve determining the market rate during the period of wrongful withholding. The rate, once determined, would be applicable to all wrongfully withheld funds.
I would remand for a determination of the rate of return that would have been earned had the appellants’ funds not been wrongfully withheld and for award of interest based thereon.