THE WHAT? A federal judge has ruled against Citibank recouping the accidental re-payment of a loan to a group of lenders of Revlon, which was mistakenly wired in August, 2020.
THE DETAILS Citibank had previously wired US$893 million to Revlon lenders – the full loan repayment – instead of the intended US$7.8 million interest payment.
Citing a ‘human error’, some lenders returned money to Citibank, however, a group including Brigade Capital Management, HPS Investment Partners and Symphony Asset Management refused to return approximately $501 million.
THE WHY? In his ruling, Judge Jesse M. Furman of the U.S. District Court in Manhattan, said, “To believe that Citibank, one of the most sophisticated financial institutions in the world, had made a mistake that had never happened before, to the tune of nearly US$1 billion, would have been borderline irrational.”
Citibank intends to appeal the decision, with the Judge placing a temporary restraining order on the 10 investment firms using the funds in anticipation of this.
Citibank said in a statement, “We believe we are entitled to the funds and will continue to pursue a complete recovery of them.”