Federal court sets interest in McWhinney case at more than $12M

Editor’s note: Defendants subject to the jury verdict were incorrectly listed in an earlier version of this story.

LOVELAND and DENVER — McWhinney Holding Co. LLLP and related legal entities may have won a $156 million judgment against former partners in the Promenade Shops at Centerra, but the parties have continued to argue over court costs and interest calculations.

U.S. District Judge R. Brooke Jackson, however, ruled Sept. 8 that McWhinney was due more than $12 million — and growing — in interest as well as $64,149 in costs in a dispute that began a decade ago.

Since the May 6 verdict in the case in which a jury determined that McWhinney partner Terry McEwen breached his fiduciary duties, fraudulently concealed critical information about the development and engaged in a civil conspiracy, among other charges, the parties have argued over the costs and when the interest clock should have started to tick.

McWhinney partners Dan and Josh Poag settled their part of the dispute prior to the May trial. The jury determined that McEwen was responsible for 15% of the damages, or about $23.4 million. 

In calculating costs, McWhinney started the interest clock on April 23, 2007, when the Poags and McEwen secretly entered into a mezzanine loan of $40 million, which the Poags needed to buy out McEwen from their partnership. That loan made it impossible for the Promenade partnership to convert its construction loan to a permanent loan and resulted in default on the project.

McEwen countered that McWhinney suffered no actual damages until the foreclosure sale on June 30, 2010, when all parties to the development deal lost their interest in the shopping center.

Judge Jackson agreed with McWhinney that the breach occurred earlier than 2010. “I suspect that, as a practical matter, the date may not mean much, unless Mr. McEwen has resources greater than what he has claimed to have,” he wrote in his decision.

Jackson amended the final judgment to:

• $64,149 in costs.
• $12.3 million in prejudgment interest.
• And $52.90 per day in post-judgment interest until the judgment is satisfied.

“The court once again urges the parties to negotiate a realistic settlement that will be paid and that will bring an end not only to this case but to any issues still remaining in the state court case,” Jackson wrote.

Comments from the parties were not readily available Friday. McWhinney said previously it was pleased with the direction that the court has taken, and McEwen’s attorneys have not responded to requests.

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