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09-4010, 10-1118 & 10-1119 Premium Plus Partners, L.P., v. Goldman, Sachs & Co.

By: WISCONSIN LAW JOURNAL STAFF//August 8, 2011//

09-4010, 10-1118 & 10-1119 Premium Plus Partners, L.P., v. Goldman, Sachs & Co.

By: WISCONSIN LAW JOURNAL STAFF//August 8, 2011//

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Civil Procedure
Interest

Where the district court awarded simple, rather than compound, interest, without explanation, the case must be remanded.

“We’ve said that Premium Plus’s own claim has been resolved, but that’s not quite right. Goldman Sachs offered the sum that Premium Plus demanded as damages, plus prejudgment interest to be determined by the judge. Judge Der-Yeghiayan awarded simple interest from the date suit was filed, rather than compound interest from the date of the injury. He did not say why. The norm in federal litigation, when prejudgment interest is authorized, is compound interest from the date of the injury. See, e.g., In re Oil Spill by the Amoco Cadiz, 954 F.2d 1279, 1331 (7th Cir. 1992); American National Fire Insurance Co. v. Yellow Freight System, Inc., 325 F.3d 924, 937–38 (7th Cir. 2003). Whether Premium Plus tarried needlessly before suing is neither here nor there. Goldman Sachs has had the money in the interim. The longer Premium Plus waited, the longer Goldman Sachs had the money, which could be invested profitably. An award of interest dating back to October 31, 2001, simply returns both the money, and the time value of its use, to Premium Plus. That the interest comes to more than 50% of the principal reflects the length of time that Goldman Sachs has had the money. This does not imply that compound interest would afford Premium Plus a windfall; the full time value of money is no windfall.”

Affirmed and Remanded.

09-4010, 10-1118 & 10-1119 Premium Plus Partners, L.P., v. Goldman, Sachs & Co.

Appeals from the United States District Court for the Northern District of Illinois, Bucklo, Der-Yeghiayan, JJ., Easterbrook, J.

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