Winning the case and getting the judgment are (rightfully) foremost in the mind of litigators seeking to enforce instruments for the payment of money. But questions of interest—what is permissible in a loan (or other) agreement, penalty interest, and how pre- and postjudgment interest are calculated—can have a large impact on the amount recovered. Litigants can end up leaving quite a bit of money on the table inadvertently and, particularly in a low interest rate environment, strategic choices can have large effects.
In two articles we will explore some of the issues that arise with respect to interest in New York. Part One looks at usury in New York and how it affects the drafting and enforceability of interest clauses in loan agreements. Part Two will look at how interest is calculated from breach through judgment to recovery, and how specific drafting choices in the loan agreement and strategic litigation choices can impact the recovery. Part Two will also offer some practical drafting and strategic advice.
