THE WHAT? Citigroup’s two-year quest to recoup cash paid to Revlon debtors in a notorious blunder has hit another bump in the road, according to a report published by Bloomberg. The US cosmetics giant filed for bankruptcy last week and has yet to list the bank as a creditor, meaning the bank may fail to recoup any of the missing cash.
THE DETAILS Revlon lenders, Brigade Capital Management, HPS Investment Partners and Symphony Asset Management, refused to repay money sent to them in error by a Citi employee back in August 2020, and a subsequent lawsuit found in favor of the trio. Citigroup’s appeal is pending.
THE WHY? It’s not difficult to see why Revlon would be tempted to challenge Citi’s claim to the cash – the debt amounts to some 15 percent of the cosmetics company’s US$3.4 billion total. However, to do so would amount to burning bridges with an important financing partner, as Bloomberg points out.