Court Of Chancery Adopts A Floating Post-Judgment Interest Rate On Remand

The award of interest is one of those questions that decides real money but rarely receives sustained judicial attention. A recent decision from the Court of Chancery is a useful reminder that, in equity, the rate of interest is a matter of discretion rather than mechanical application of a statute. In William J. Brown v. Matterport, Inc., C.A. No. 2021-0595-LWW (Del. Ch. June 1, 2026), Vice Chancellor Lori W. Will, on a limited remand from the Delaware Supreme Court, declined to adopt either party’s preferred fixed rate and instead ordered post-judgment interest to accrue at a floating rate tied to the Federal Reserve discount rate.

Background

The dispute returned to the Court of Chancery after the Delaware Supreme Court affirmed the court’s post-trial decision in all other respects but remanded for the limited purpose of recalculating post-judgment interest tied to the July 1, 2024 Order and Final Judgment. See Matterport, Inc. v. Brown, 340 A.3d 1149 (Del. 2025) (ORDER). Prejudgment interest on the damages award had accrued at a rate of 5.25%, compounded quarterly, through July 1, 2024. The Supreme Court affirmed that figure. In remanding, the high court made clear that the trial court remained free to exercise its discretion as to the rate of post-judgment interest and whether and to what extent it should be compounded.

That left a discrete but consequential question on remand. Plaintiff William Brown argued that 6 Del. C. § 2301 mandated a fixed rate of 10.50%, calculated from the Federal Discount Rate in effect on July 1, 2024 plus five percent. The defendants urged the court to keep the 5.25% rate used for prejudgment interest, contending that anything higher would hand Brown a windfall.

Analysis

Vice Chancellor Will began from a principle that practitioners should keep front of mind: in the Court of Chancery, the statutory legal rate serves as a benchmark, not an inflexible rule. Quoting the Supreme Court’s decision in Energy Transfer, LP v. Williams Cos., 346 A.3d 1089 (Del. 2023), the court reiterated that the legal rate is “a mere guide.” From that premise, the Vice Chancellor rejected both parties’ fixed-rate proposals.

A fixed 10.50% rate, the court explained, would create an inequitable windfall for Brown and would effectively operate as a sanction for conduct the court had previously found stemmed from a good-faith misunderstanding. At the same time, locking in a fixed 5.25% rate in a high-interest environment would not fully compensate Brown for the loss of the use of his funds; it would instead subsidize the defendants’ continued retention of those funds.

The court’s solution was to apply a floating rate. Post-judgment interest will accrue at a rate equal to five percent over the Federal Reserve discount rate, fluctuating with that rate, compounded quarterly. Citing Fortis Advisors LLC v. Johnson & Johnson, 2024 WL 4048060 (Del. Ch. Sept. 4, 2024), aff’d in part, rev’d in part on other grounds sub nom. Johnson & Johnson v. Fortis Advisors LLC, 352 A.3d 229 (Del. 2026), and Murphy Marine Services of Delaware, Inc. v. GT USA Wilmington, LLC, 2022 WL 4296495 (Del. Ch. Sept. 19, 2022), the Vice Chancellor reasoned that a variable rate accounts for the economic realities and significant fluctuations in interest rates during the relevant period, and that compounding reflects the financial realities of conducting business.

It is worth noting how narrow the actual dispute was. Brown’s proposed 10.50% and the court’s floating rate share the same 5% spread over the Federal Reserve discount rate; both derive from the Section 2301 formula. The difference was the timing input. Brown wanted the discount rate frozen at its July 1, 2024 level, producing a fixed 10.50%, while the court adopted the same formula but let the discount-rate input float over the life of the judgment. The court did not reject Section 2301’s methodology so much as the fixed snapshot Brown sought to build on top of it.

Two further points are worth noting. First, Brown argued in reply that if a floating rate applied to post-judgment interest, equity required the same treatment for prejudgment interest. The court held it could not revisit the 5.25% prejudgment rate, because the Supreme Court had affirmed that award and the mandate and law of the case constrained the court on remand. See Cede & Co. v. Technicolor, Inc., 884 A.2d 26 (Del. 2005). Second, the court denied the defendants’ request to terminate the accrual of post-judgment interest. The defendants could have stopped interest from running by satisfying the judgment; having chosen not to do so, they could not complain that interest continued to accrue until the judgment is paid in full.

Key Takeaways

Brown v. Matterport is a practical reminder that in the Court of Chancery the choice of interest rate is an exercise of equitable discretion rather than a fill-in-the-blank application of Section 2301. Litigants who assume the statutory legal rate will govern, or who treat the prejudgment rate as automatically carrying over to the post-judgment period, may be disappointed. The court will look to whether the rate fully compensates the prevailing party for the loss of the use of its money without producing a windfall, and a floating rate tied to the Federal Reserve discount rate is an increasingly common way to thread that needle in a volatile rate environment.

The decision also underscores a point defendants sometimes overlook: post-judgment interest keeps running until the judgment is paid. A defendant who wishes to stop the meter can do so by satisfying the judgment, and a defendant who elects to hold the money instead should expect to pay for the privilege. As I previously discussed in “Valuation Victory for Insurance Broker: Delaware Court Awards $416K in Partnership Dispute,” the back-end mechanics of a damages award, including valuation, interest, and the date the money actually changes hands, often determine the real value of a win.