In the United States Court of Federal Claims
No. 12-889L and No. 13-404L (Consolidated)
(Filed: January 28, 2016)
) Rails-to-trails takings case; class action;
CLAUDE SEARS, et al., ) interest rate to be applied as part of the
) otherwise tentatively agreed just
Plaintiffs, ) compensation for a subclass
)
v. )
)
UNITED STATES, )
)
Defendant. )
)
Thomas S. Stewart, Stewart Wald & McCully LLC, Kansas City, Missouri, for plaintiffs.
With him on the briefs were Elizabeth G. McCulley and Steven M. Wald, Stewart Wald &
McCully LLC, Kansas City, Missouri, and St. Louis, Missouri.
Gregory D. Page, Trial Attorney, Natural Resources Section, Environment & Natural
Resources Division, United States Department of Justice, Washington, D.C., for defendant.
With him on the briefs was John C. Cruden, Assistant Attorney General, Environment & Natural
Resources Division, United States Department of Justice, Washington, D.C.
OPINION AND ORDER
LETTOW, Judge.
Before the court in this rails-to-trails takings case are the government’s motion for partial
summary judgment and plaintiffs’ cross-motion for partial summary judgment under Rule 56(a)
of the Rules of the United States Court of Federal Claims (“RCFC”). Both motions pertain to the
interest rate that should be applied beyond February 3, 2016 as part of the just compensation that
has otherwise been tentatively agreed for the largest subclass of plaintiffs as a result of the
alleged taking.
At issue in this case are 269 parcels of land in Marshall and Hardin Counties, Iowa that
adjoin a former railroad line operated by Iowa River Railroad, Inc. that has been converted into a
trail. In October 2015, the parties notified the court that after approximately four months of
settlement negotiations, they had reached a tentative agreement on just compensation except for
the continuing rate of interest to which plaintiffs would be entitled beyond February 3, 2016. At
that time, the parties proposed and the court accepted that the parties would brief the issue of
continuing interest for the court’s decision.1
The government argues that the continuing interest rate should be based on the United
States Treasury’s Separate Trading of Registered Interest and Principal of Securities (“STRIPS”)
five-year instrument. The plaintiffs object to the STRIPS interest rate as artificially low and
contend that an interest rate based on the annual return of a diversified mutual fund such as the
Vanguard Balanced Index Fund (“VBINX”), or alternatively the Moody’s Long-Term Aaa
Corporate Bond Index (“Moody’s Aaa Index”), would provide just compensation to plaintiffs.
For the reasons discussed in this opinion, the court has concluded that the Moody’s Aaa Index is
the appropriate basis for determining the continuing interest rate to which the tentatively settling
subclass may be entitled.
BACKGROUND
The 269 parcels at issue in this case contain a portion of a right-of-way for railroad
purposes previously held by Iowa River Railroad “extending from milepost 243.35 near
Marshalltown, Iowa, to milepost 209, outside Steamboat Rock, Iowa, a total distance of 34.35
miles, in Marshall and Hardin Counties, Iowa.” Sears, __ Fed. Cl. at __, 2015 WL 9311530, at
*1. Under provisions of the National Trails Systems Act, the federal government’s Surface
Transportation Board issued a Notice of Interim Trail Use or Abandonment (“NITU”) on August
2, 2012, converting the right-of-way from railroad use to a public trail. Id. Plaintiffs claim that
Iowa River Railroad had abandoned the right-of-way prior to its conversion to a trail, and as a
result, plaintiffs had regained full rights to the land free of any easement. Id. at *2.
Consequently, plaintiffs assert “that by issuing the NITU . . . , the government has taken their
property interests without compensation in contravention of the Fifth Amendment.” Id.
The court certified the original class in this case in July 2013 and the parties conducted
pre-trial proceedings until June 2015, at which point the parties notified the court they were
negotiating a settlement agreement. Sears, __ Fed. Cl. at __, 2015 WL 9311530, at *2.
However, plaintiffs’ counsel noted there was difficulty in resolving the claims pertaining to
certain “severed agricultural properties.” Id. By August 31, 2015, the parties had resolved
property values and had agreed on an interest rate for the period between August 2, 2012 (the
date of the NITU) and February 3, 2016. Id. In October 2015, however, the parties informed the
court that they had reached an impasse on the remaining issue in the settlement negotiations: the
continuing rate of interest beyond February 3, 2016. Id. The parties presented various options to
resolve this dispute, and the court and the parties accepted ultimately that the parties would brief
the continued-interest issue for the court’s decision. Id. That briefing pertains to the subclass of
1
Owners of 21 of the 269 parcels at issue balked at the partial settlement as it was being
completed and requested that the court schedule a trial respecting their claims. See Sears v.
United States, __ Fed. Cl. __, 2015 WL 9311530 (Dec. 22, 2015). At the request of those
disagreeing owners, the court split the class into two subclasses, the angularly-bisected
agricultural-property subclass for those wishing to proceed to trial and a settlement subclass for
those desiring to maintain the partially-agreed settlement. Id., __ Fed. Cl. at __, __, 2015 WL
9311530, at *4-*6.
2
248 of 269 parcels, the owners of which may proceed with settlement and excludes the
angularly-bisected agricultural-property subclass that will proceed to trial. Id. at *6.
The key to this dispute is the interest-rate posture existing in the United States during the
period commencing with the date of the taking, August 2, 2012. The government submitted its
motion for partial summary judgment on the continuing interest issue on December 11, 2015.
United States’ Mot. for Partial Summary Judgment Regarding the Interest Rate to Be Applied
After February 3, 2016 (“Def.’s Mot.”), ECF No. 56. In its motion, the government argues that a
market interest rate for United States Treasury securities, and specifically the interest rate
associated with five-year STRIPS, is the most appropriate rate for application to delayed
compensation in takings cases such as this one, where the United States is in essence a borrower
and the plaintiffs are creditors. Def.’s Mot. at 2-3. Plaintiffs submitted their cross-motion on
January 6, 2016, arguing conversely that the five-year STRIPS rate undervalues plaintiffs’ “loan”
to the government, and that the VBINX rate of return, or alternatively the Moody’s Aaa Index
rate of return, would more accurately represent the return expected by a reasonably prudent
investor during the same time period. Pls.’ Resp. to Def.’s Mot. and Cross-Mot. for Partial
Summary Judgment Regarding the Interest Rate to Be Applied After February 3, 2016 (“Pls.’
Cross-Mot.”) at 3-4. Both parties submitted declarations by proffered experts in support of their
positions. See Def.’s Mot. Ex. B (Decl. of Dr. William R. Johnson, Georgia Bankard Professor
of Economics at the University of Virginia (Dec. 11, 2015) (“Johnson Decl.”)); Pls.’ Cross-Mot.
Ex. A (Decl. of Prof. Todd T. Milbourn, Hubert C. and Dorothy R. Moog Professor of Finance at
the Olin Business School, Washington University in St. Louis (Jan. 4, 2016) (“Milbourn
Decl.”)). The issue has been fully briefed and addressed at a hearing on January 26, 2016, and it
is now ready for disposition.
ANALYSIS
A. Partial Summary Judgment
Under RCFC 56(a), the court will grant summary judgment on any claim or defense – or
any part thereof – when “there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” RCFC 56(a); see also Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247-48 (1986). A genuine dispute is one that “may reasonably be resolved in
favor of either party.” Anderson, 477 U.S. at 250. With regard to issues of material fact, the
court must draw inferences from the underlying facts “viewed in the light most favorable to the
party opposing the motion.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
587 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)). Where cross-
motions for summary judgment have been filed on the same claim or part of a claim, “the court
must evaluate each party’s motion on its own merits, taking care in each instance to draw all
reasonable inferences against the party whose motion is under consideration.” Mingus
Constructors, Inc. v. United States, 812 F.2d 1387, 1391 (Fed. Cir. 1987).
In this instance, the parties agree on all facts material to the question of what interest rate
should be applied to any compensation due to the subclass beyond February 3, 2016. The parties
do not dispute that the date of the alleged taking is August 2, 2012, nor do they dispute the
reported rates of return since that time of the three instruments (five-year STRIPS, the VBINX,
3
and the Moody’s Aaa Index) proffered as options on which to base the continuing interest rate.
See Johnson Decl. at 14 (reporting the annual market yield of a five-year STRIPS instrument on
August 3, 2012 as 0.752 percent, and the annual yield of the Moody’s Aaa Index as 3.39 percent
during the same period); Milbourn Decl. ¶ 28 & Ex. E (reporting the annualized return of the
five-year STRIPS instrument as 0.757 percent, the Moody’s Aaa Index as 3.39 percent, and the
VBINX as 9.0 percent).2 With this agreement on the underlying facts, the parties focus their
attention on the pertinent inferences to be drawn from the facts and the legal test to be applied to
those inferences. See RCFC 56(a).
B. Applicable Pre-Judgment Interest Rate Beyond February 3, 2016
The Fifth Amendment to the U.S. Constitution provides that the U.S. government cannot
take private property for public use without providing the property owner “just compensation.”
U.S. Const. amend. V. In most cases, “just compensation” is the “fair market value of the
property on the date it is appropriated.” Kirby Forest Indus. v. United States, 467 U.S. 1, 10
(1984). If there is a delay between the time the property is taken and the receipt of
compensation, the owner is also entitled to interest “sufficient to ensure that he is placed in as
good a position pecuniarily as he would have occupied if the payment had coincided with the
appropriation.” Id. (citing Phelps v. United States, 274 U.S. 341, 344 (1927); Seaboard Air Line
R. Co. v. United States, 261 U.S. 299, 306 (1923)).
2
The government’s expert, Professor Johnson, disagrees that the VBINX yield was a
consistent 9.0 percent, noting that of “43 quarters from January 1, 2005 to September 30, 2015,
VBINX had a negative total return in thirteen quarters, or over 30 percent of this period.” Def.’s
Reply Ex. C (Second Decl. of Dr. William R. Johnson (“Johnson Second Decl.”)), ECF No. 64.
Because the VBINX includes both debt and equity securities, Milbourn Decl. ¶¶ 169-177
(addressing returns of balanced funds), some amount of volatility is perhaps to be expected.
Professor Milbourn advocated determining an interest rate by taking into account the
risk attendant to the property being taken, in this instance, Iowa farm land, which historically has
varied significantly in value over time. Milbourn Decl. ¶¶ 125-128. Correlatively, Professor
Johnson commented that “Iowa farmland is . . . a risky investment historically, and its price
changes also overstate the investment return because of the costs of holding land.” Johnson
Decl. ¶ 48; see also id. at 23 (setting out in graphical form the annual rate of change in the
average price of Iowa farmland located in Hardin and Marshall counties).
Nonetheless, in determining an appropriate interest rate, the court has not taken into
account the risk inherent in the property being taken, i.e., Iowa farmland. The risk tolerance of
the property owner-investor does not necessarily guide application of the prudent investor rule.
See Independence Park Apartments v. United States, 61 Fed. Cl. 692, 717 (“The prudent-investor
rule does not turn on how a particular plaintiff would have invested a recovery. Rather, it seeks
to assure ‘how a reasonably prudent person would have invested the funds to produce a
reasonable return while maintaining safety of principal.’” (quoting Tulare Lake Basin Water
Storage Dist. v. United States, 61 Fed. Cl. 624, 627 (2004)) (some internal quotation marks
omitted)), mot. for recons. granted in part and denied in part on other grounds, 62 Fed. Cl. 684
(2004), rev’d and remanded on other grounds, 449 F.3d 1235 (Fed. Cir. 2006), clarified on
reh’g, 465 F.3d 1308 (Fed. Cir. 2006).
4
There is no consensus among courts as to the interest rate that should be applied in claims
for just compensation under the Fifth Amendment. See Tulare Lake, 61 Fed. Cl. at 627. In some
cases, courts have applied the interest rate set forth in the Declaration of Taking Act, 40 U.S.C.
§ 3116, which states that in condemnation cases, the interest rate shall be tied to the “one-year
constant maturity Treasury yield” (the yield of the security known as the 52-week Treasury bill,
or “T-bill”). See, e.g., Textainer Equip. Mgmt. Ltd. v. United States, 99 Fed. Cl. 211, 223 (2011)
(adopting the position that “[a]bsent special proof, the statutorily-set rate in the [Declaration of
Taking Act] shall apply”); Vaizburd v. United States, 67 Fed. Cl. 499, 504 (2005) (same); NRG
Co. v. United States, 31 Fed. Cl. 659, 668-69 (1994).3 In other instances, courts have applied an
interest rate based on an instrument appropriate to the specific factual setting at hand,
particularly “the economic circumstances prevailing in the years between the date of the taking
and the [projected] date of payment.” Georgia-Pacific Corp. v. United States, 640 F.2d 328, 366
(Ct. Cl. 1980) (applying a variable interest rate based on the Moody’s Index for a takings period
from 1975 to 1980); see also Antoine v. United States, 710 F.2d 477, 480 (8th Cir. 1983)
(affirming the application of a five-percent interest rate based on “economic circumstances
between the date of taking and the date of payment”); Miller v. United States, 620 F.2d 812, 840
(Ct. Cl. 1980) (applying a circumstance-based methodology to a takings period from 1968 to
1980); Pitcairn v. United States, 547 F.2d 1106, 1120-21 (Ct. Cl. 1976) (applying a similar
methodology to a takings period from 1947 to 1975); Tulare Lake, 61 Fed. Cl. at 628 (basing the
interest rate on the rate of return from three state-sanctioned investment accounts proposed by
plaintiffs).
As the government notes in its motion, this court has previously determined the
appropriate interest rate in takings cases based on three criteria: (1) the amount of risk to the
creditor, (2) the length of the interest period as compared to the maturity of the instrument on
which the interest rate is based, and (3) the “uniformity of treatment to similarly situated
litigants.” Independence Park, 61 Fed. Cl. at 716-17 (citing Georgia-Pacific Corp., 640 F.2d at
365-66); see Def.’s Mot. at 2-3 (citing National Food & Beverage Co. v. United States, 105 Fed.
Cl. 679, 704 (2012) (applying these criteria and selecting a STRIPS rate as the appropriate
determinant of interest); Arkansas Game & Fish Comm’n v. United States, 87 Fed. Cl. 594, 646
(2009) (same), rev’d on other grounds, 637 F.3d 1366 (Fed. Cir. 2011), rev’d and remanded, __
U.S. __, 133 S. Ct. 511 (2012), aff’d after remand from the Supreme Court, 736 F.3d 1364 (Fed.
Cir. 2013); CCA Assocs. v. United States, 75 Fed. Cl. 170, 205 (2007) (same), aff’d in part,
vacated in part, and remanded on other grounds, 284 Fed. Appx. 810 (Fed. Cir. 2008)). The
court explicitly based these criteria on the “prudent investor rule,” which seeks to determine
“how ‘a reasonably prudent person’ would have invested the funds [owed by the government] to
‘produce a reasonable return while maintaining safety of principal.’” Independence Park, 61
Fed. Cl. at 717 (quoting Tulare Lake, 61 Fed. Cl. at 627 (in turn quoting United States v. 429.59
Acres of Land, 612 F.2d 459, 464-65 (9th Cir. 1980))). In doing so, this court rejected the
3
The Declaration of Taking Act applies to condemnation cases in which the government
formally uses its power of eminent domain to seize property for public use. 40 U.S.C. § 3114;
see also Tulare Lake, 61 Fed. Cl. at 629 (explaining the legislative history and recounting the
Supreme Court’s interpretation of the Act). Its provisions are not binding on other types of Fifth
Amendment takings cases, such as the present rails-to-trails case. Tulare Lake, 61 Fed. Cl. at
629.
5
assertion that where the United States is the defendant, the prudent investor rule requires the
interest rate to be based on U.S. Treasury securities, particularly when another instrument such
as the Moody’s Aaa Index can provide a similar “safety of principal” investment over a period
spanning a number of years. Id.
Here, the government urges that U.S. Treasury bonds “are the only market interest rates
. . . that the Fifth Amendment requires to rectify delays in paying just compensation” because
these are the only rates “for loans to the United States that are certain to be repaid with interest.”
Def.’s Mot. at 2. In effect, the government argues that because the United States was the
“borrower” in this case, the interest rate must be tied to a government-sponsored instrument
because those instruments provide a matching level of payment risk to the creditors, i.e., the
plaintiffs in this case. Id. To support this contention, the government’s expert, Professor
Johnson, focuses on the role of the United States as the “borrower” and the attendant need to tie
the interest rate to an instrument with the same certainty of payment as a U.S. government bond
because “there is no true risk of default here.” Johnson Decl. ¶ 14. For this reason, Professor
Johnson rejects the use of a “riskier” instrument such as the VBINX or the Moody’s Aaa Index
because it “would overcompensate plaintiffs by rewarding them for risks that they clearly would
not take here.” Id. ¶ 13.
By contrast, the subclass plaintiffs argue that an interest rate tied to government securities
would not satisfy the prudent investor rule because these rates have been kept at artificially low
levels since the financial crisis struck late in 2008. Pls.’ Cross-Mot. at 14 (citing Milbourn Decl.
¶¶ 79-80). Indeed, plaintiffs argue that a reasonably prudent investor would not have invested in
Treasury notes since 2008 because interest rates on these securities have been negligible over the
ensuing time, and not sufficient to match the rate of inflation. Id.; see also Milbourn Decl. ¶ 82;
see also Second Johnson Decl. ¶ 8 (“In a severe financial crisis, such as 2008 for example, there
is a flight to the safety of United States securities by investors, so the demand for government
bonds rises (and thus their interest rates fall) relative to the demand for riskier corporate debt.”).
Instead, as plaintiffs would have it, a reasonably prudent investor would invest in a diversified
mutual fund such as VBINX, which they argue still provides a comparatively low risk coupled
with a much higher rate of return. Id. at 20-21. Alternatively, plaintiffs acknowledge that the
Moody’s Aaa Index has consistently been used as a “fair and proper measure” of interest rates,
particularly when there is evidence that Treasury securities are not an adequate reflection of
general market or investment trends. Id. at 27-28.
As a threshold matter, the court is not obliged to base the interest rate on U.S. Treasury
securities simply because the U.S. government is the alleged “borrower.” See Independence
Park, 61 Fed. Cl. at 717. Treasury securities may not be appropriate measures of the interest rate
due to plaintiffs depending upon “the economic circumstances prevailing in the [pertinent]
years.” Georgia-Pacific Corp., 640 F.2d at 366; Miller, 620 F.2d at 840; Pitcairn, 547 F.2d at
1120-21; Tulare Lake, 61 Fed. Cl. at 628. If those circumstances reflect atypical market
conditions or exceptional interest-rate policies by the Federal Reserve System, Treasury
securities may not be suitable benchmarks. The guiding principle throughout is the prudent
investor rule, which seeks to account for all relevant factors in its contemplation of what a
reasonably prudent investor would do under similar circumstances. Independence Park, 61 Fed.
Cl. at 717.
6
Interest rates on U.S. Treasury securities have been kept artificially low since the
financial crisis of 2008. See Pls.’ Cross-Mot. at 15 (noting that the average one-year Treasury
rate was 6.1 percent prior to 2008, but has been 0.23 percent since 2009); see also Milbourn
Decl. at ¶¶ 89-90 (citing the Board of Governors of the Federal Reserve System’s Response to
the Financial Crisis and Actions to Foster Maximum Employment and Price Stability, set out at
http://www.federalreserve.gov/monetarypolicy/bst_crisisresponse.htm (last visited Jan. 27,
2016)); Johnson Decl. ¶ 38; Adkins v. United States, Nos. 09-503L, 09-241L, & 09-158L, 2014
WL 448428, at *1-*2 (Feb. 4, 2014) (noting that Moody’s Index, as opposed to U.S. Treasury
securities, “provided the best approximation of actual market conditions from 2007 to 2012”);
Biery v. United States, Nos. 07-693L & 07-675L, 2012 WL 5914521, at *4 (Nov. 27, 2012)
(deciding to apply Moody’s Index because Treasury securities “ha[d] been held artificially low
for much of the relevant timeframe” (2004-2012)), appeal pending, No. 14-5084 (Fed. Cir.). Not
until December 2015 did the Federal Reserve raise the benchmark federal-funds rate above near-
zero, and then it only raised that rate to 0.25 percent. See Board of Governors of the Federal
Reserve System, Open Market Operations, http://www.federalreserve.gov/monetary
policy/openmarket.htm (last visited Jan. 27, 2016).
Professor Johnson, the government’s expert, recognizes that an investment in relatively
short-term U.S. securities has recently been, and in the near future could well be, less than the
rate of inflation. As he puts it:
In that case there would be erosion of purchasing power (though slightly less
than I previously calculated because of the negative inflation rate for November
2015). I showed how the plaintiffs could be easily compensated for any purchasing
power loss by calculating the prejudgment interest rate as the maximum of the
five-year STRIPS rate or the inflation rate. Further, . . . over the past fifteen years,
the STRIPS rate usually exceeds the inflation rate and thus has not simply protected
this security’s principal or cash basis, but also has increased purchasing power by
providing investors with positive real rates of return averaged over the entire period
between 2000 and 2014, though clearly not for some subperiods.
Second Johnson Decl. ¶ 6. The failure of five-year STRIPS to keep pace with inflation over the
pertinent period in this case confirms a determination that the five-year STRIPS rate is an
inappropriate basis for deriving interest as a part of just compensation on the property value
taken.
In short, under present market conditions, a prudent investor would seek a higher rate of
return over a period that encompassed the time since August 2012 and extended at least through
a substantial portion of 2016 (when payment of just compensation might occur at the earliest),
even if such an investment would involve a slightly higher risk. In addition, in an interest-rate
environment changing from artificially very low rates, liquidity becomes an issue. Because of
the Assignment of Claims Act, 31 U.S.C. § 3727, plaintiffs in this takings case could neither sell
their claims against the government for just compensation nor could they pledge those claims as
security for a borrowing. See Milbourn Decl. ¶ 104. That detriment should also be taken into
account in the court’s determination of an appropriate interest rate.
7
Nonetheless, the court does not agree with plaintiffs that a diversified mutual fund such
as VBINX is the best instrument against which to measure the interest rate due in this case.
Although such an investment might otherwise be considered “prudent” under some economic
conditions, it does not currently comport sufficiently with the “minimal risk” criterion. See Pls.’
Cross-Mot. at 23-34 (acknowledging that the VBINX fund has a volatility of 7.4 percent); Def.’s
Reply at 5. By contrast, this court has already recognized the Moody’s Index as “an indicator of
broad trends and relative levels of investment yields or interest rates” and as an instrument that
“cover[s] the broadest segment of the interest rate spectrum.” Pitcairn, 547 F.2d at 1124. Thus,
although the government notes that the Moody’s Aaa Index had a 10-year default rate of 0.52
percent between 1971 and 2007, Def.’s Mot. at 13, this type of investment still would provide a
comparatively minimal risk over the longer term, particularly since these “Aaa rated” bonds are
specifically classed as relatively safe investments, Milbourn Decl. ¶¶ 74-75; see also Second
Johnson Decl. ¶ 3 (“Dr. Milbourn and I agree that defaults by highly rated companies are
relatively rare events but they do occur.”). Moreover, as Professor Johnson acknowledges, “Dr.
Milbourn opines (paragraphs 85-86) that, during the financial crisis, corporate bonds were less
affected by Federal Reserve policy than U.S. bonds. He bases that statement on the observation
that corporate interest rates fell less (proportionately) than did government interest rates during
the ‘Great Recession’ that began in 2008, which can be seen in Figure 1 of my first declaration.”
Second Johnson Decl. ¶ 7.
Consequently, the court concludes that the appropriate measure for interest beyond
February 3, 2016 in this case is an annual rate of 3.39 percent, compounded quarterly, reflecting
the Moody’s Long-Term Aaa Corporate Bond Index, because that rate comports with the prudent
investor rule in the circumstances at hand.4
CONCLUSION
For the reasons stated, the government’s motion for partial summary judgment is
DENIED, and plaintiffs’ motion for partial summary judgment is GRANTED in part and
DENIED in part. The rate of return from the Moody’s Long-Term Aaa Corporate Bond Index,
i.e., 3.39 percent, compounded quarterly, shall be used to determine the interest component of
the just compensation due to the subclass plaintiffs beyond February 3, 2016.
The court requests that the parties file a joint status report on or before February 17,
2016, respecting whether a settlement is now feasible for the larger “settlement” subclass and
regarding proposed arrangements for trial of the claims of the angularly-bisected agricultural-
property subclass.
4
By advocating use of five-year STRIPS as the measure of interest, the government in
essence concedes that compounding is appropriate here because STRIPS are “zero coupon
obligation[s]” paid at face value on maturity, Johnson Decl. ¶ 21, with the compounded interest
determined by the discount at which they are purchased and the time to maturity.
8
It is so ORDERED.
s/ Charles F. Lettow
Charles F. Lettow
Judge
9