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In re James Hicks, Jr.

On the City of Chicago’s objection to the chapter 7 trustee’s final report, held:  Despite a provision in title 28 defining “the legal rate” as the federal judgment rate, the legal rate for postpetition interest in bankruptcy matters is that prescribed by bankruptcy law under title 11.  Legislative history and long-extant bankruptcy law known as the solvent debtor exception indicates that using a contractually agreed upon interest rate or the applicable state interest rate is the proper interest rate for postpetition interest to a creditor in bankruptcy matters.  The adoption of the Bankruptcy Code did not change that prior practice.  For these reasons, the City’s objection is SUSTAINED.

Thursday, August 31, 2023