It appears we mayÂ have been misled about the amount of pre-judgment interest Rich Rodriguez might owe WVU on the now-breached $4 million buyout clause in his contract. WVU attorneys have told various media outlets — including mine — that the university is expecting to collect the full amount, plus interest at about $4,000 daily.
This opened eyes … and legal books. Seems it might not be accurate. Let’s take a trip inside my e-mail inbox…
This was a response to a story I wrote last week regarding the progress of the legal proceedings, which included the accumulation of interest.
West Virginia law (which would be followed even if this case remains in federal court) provides that statutory pre-judgment interest is 10% per annum (10 percent per year). Â Accordingly, a $4,000,000.00 judgment would result in $400,000.00 in interest per year. Â $400,000.00 divided by 365 (the amount of days in a year, excepting leap years) is $1,095.89 per day. Â This is still a substantial amount which, as many defendants do not
realize, accumulates rapidly.
I was intrigued and replied and this person replied back to me:
I just went back and actually checked the statute (W.Va. Code 56-6-31) to be sure. Â A change, effective January 1, 2008, is that prejudgment interest is now 8.25% per annum for judgments and decrees entered in 2008 (not 10% as originally I stated from memory).
Thus, $4,000,000.00 times 8.25% is $330,000.00 in interest per annum. Â $330,000.00 divided by 365 is $904.11. Â Accordingly, the “per day interest would be $904.11 per day (not using a calculation based upon daily compounded totals).