What is the general rule on interest during liquidation?

California, United States of America


The following excerpt is from People v. Warfel, 162 Cal.App.2d 400, 328 P.2d 456 (Cal. App. 1958):

The cited case of Greva v. Rainey, 2 Cal.2d 338, 41 P.2d 328, likewise dealt with a statute which was silent on the subject of interest during liquidation. The general rule was stated to be 'that after property of an insolvent is in custodia legis interest thereafter accruing will not be allowed.' 2 Cal.2d at page 343, 41 P.2d at page 330. But the court held it not applicable where assets are sufficient to pay all claims in full, saying further that the general rule exists 'not because the claims were considered to have lost their interest-bearing quality, but because in the great majority of cases the assets were insufficient to pay both the principal and the interest which would otherwise become due [2 Cal.2d at page 343, 31 P.2d at page 330]; * * * all creditors are entitled to equal consideration

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