In Re Samuel Duke Cardelucci, Debtor. Willem Onink, Marsha Onink v. Samuel Duke Cardelucci

Appellants Willem and Marsha Onink appeal the district court’s application of the federal interest rate as defined by 28 U.S.C. § 1961 (a) to an award of post-petition interest pursuant to 11 U.S.C. § 726 (a)(5). This appeal presents the narrow but important issue of whether such post-petition interest is to be calculated using the federal judgment interest rate or is determined by the parties’ contract or state law. We conclude that 11 U.S.C. § 726 (a)(5) mandates application of the federal interest rate. Accordingly, we AFFIRM.

Appellee Samuel Duke Cardelucci owns and operates several rubbish companies in Southern California. On January 15, 1993, a California state court jury found that Cardelucci had engaged in predatory pricing and was jointly and severally liable to the Oninks for unfair trade practices. The state court subsequently entered judgment in the amount of $5,423,825.50 plus interest calculated at the rate of 10% per annum in favor of the Oninks. The state court judgment was ultimately affirmed on appeal with the amount of damages modified to $5,273,147.50 plus interest at the applicable legal rate.

After judgment was entered in the state court action,…