Citibank tries to recover USD 175 million from a transfer it made by mistake to Brigade Capital


The US banking giant Citibank has asked a federal court to force the hedge fund Brigade Capital to return $175 million. The money is part of the USD 900 million that the bank accidentally transferred to the creditors of the cosmetics company Revlon. This was reported by CNN Business.

The bank has recovered less than half of the money, which it attributed to a clerical error. Some of the lenders are refusing to pay it back, including three companies that claimed Revlon was in default on a loan and should have paid it back anyway, according to people with knowledge of the matter.

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In a lawsuit filed in New York, Citigroup, which is the managing agent of the loan, said it intended to make interest payments on behalf of Revlon, but accidentally transferred more than 100 times that amount.

Brigade was supposed to receive $1.5 million in interest on the principal of the $174.7 million loan, according to the complaint. Instead, he obtained $176.2 million and has refused to repay the funds „despite clear evidence that the payments were made in error,“ Citigroup said.

Federal District Judge Jesse Furman in New York scheduled a conference call for Tuesday morning to discuss Citigroup’s request for a temporary restraining order.

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Citigroup blames the accidental overpayment on an „operating error.
„When Citibank discovered the error, it quickly asked recipients to return their money,“ the third largest U.S. bank said at the presentation.

Citigroup was preparing to resign as managing Immediate Bitcoin agent for the Revlon loan when it accidentally transferred approximately $900 million to the lenders last week amid a bitter fight between the cosmetics company and the creditors.

Brigade had lent money to Revlon and the wrong payment covered the outstanding amount, although that doesn’t mean Brigade necessarily had a right to receive it now. It was only an interest payment of a much smaller amount that Citibank intended to pay on Revlon’s behalf.