Plaintiffs-appellants George and Georgia Diamond filed an adversary proceeding against Chapter 7 debtor Scott Bakay alleging that Bakay fraudulently induced them to loan him money. The bankruptcy court entered summary judgment in favor of the Diamonds and declared the loan nondischargeable, but denied the Diamonds postjudgment motion for prejudgment interest. The Diamonds appealed this latter decision, and the Bankruptcy Appellate Panel of the Tenth Circuit (BAP) affirmed the decision of the bankruptcy court. The Diamonds appealed to the 10th Circuit Court of Appeals.
Under federal law, “prejudgment interest may generally be awarded if 1) the award of prejudgment interest would serve to compensate the injured party, and 2) the award of prejudgment interest is otherwise equitable.” In re Inv. Bankers, 4 F.3d at 1566. “Thus under federal law prejudgment interest is ordinarily awarded, absent some justification for withholding it.” U.S. Indus., Inc. v. Touche Ross & Co., 854 F.2d 1223, 1256 (10th Cir. 1988), overruled on other grounds as recognized by Anixter v. Home-Stake Prod. Co., 77 F.3d 1215, 1231 (10th Cir. 1996). That said, however, prejudgment interest “is not recoverable as a matter of right.” U.S. Indus., 854 F.3d at 1256. Instead, “awards of prejudgment interest are governed by fundamental considerations of fairness.”
Affirmed.
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