Citibank loses $500 million in mistaken payment to Revlon lenders, rules US court
U.S. District Judge Jesse Furman in New York ruled on Tuesday that recipients who received 500 million dollars last year mistakenly transferred to cosmetic company Revlon’s lenders.
The mistake pushed Citi to reassess its internal controls while also responding to lawmakers. The judge ruled that the lender’s asset managers — including Brigade Capital Management, HPS Investment, and Symphony Asset Management — don’t have to return more than $500 million that Citibank said it mistakenly transferred in August while trying to make an interest payment.
“Given a choice between assuming that Revlon had paid off the 2016 Term Loan early — as borrowers sometimes do — and assuming that Citibank or Revlon had mistakenly transferred over $900 million — something no bank may have ever done before (and may never do again) — it would have borderline irrational to choose the latter,” Furman said.
Recipients of cash wired in error are typically required to return it. But in this case, the creditors had reasonable grounds to believe the payment was intentional, Judge Jesse M. Furman of the U.S. District Court in Manhattan wrote in his ruling.
“We strongly disagree with this decision and intend to appeal,” said Citigroup spokesperson Danielle Romero-Apsilos. “We believe we are entitled to the funds and will continue to pursue a complete recovery of them.”