Revlon Lenders Want Expert to Look at Citi’s $900 Million Error
Revlon Lenders Want Expert to Look at Citi’s $900 Million Error
(Bloomberg) -- A group of Revlon Inc. creditors who were sued by Citigroup Inc. to recover nearly $900 million in funds mistakenly sent to them last month want an expert to weigh in on whether they should have known the transfer was in error.
Citigroup, which is the administrator on the loan to Revlon, says an employee error caused it to mistakenly pay out a sum roughly 100 times larger than the interest payment the creditors expected. The bank has filed lawsuits against 11 creditors seeking to recover the money, which was paid out of Citigroup’s own funds rather than Revlon’s. A trial in the case is scheduled for November.
The creditors on Wednesday asked U.S. Judge Jesse Furman to allow them to present testimony from a unnamed expert with more than four decades of experience in the corporate loan market, who served as a senior executive in several financial institutions where he established and managed global loan businesses.
“This expert would opine on how lenders in the market and their managers would respond to the receipt of wires such as those at issue in the case, and how surrounding circumstances and events would frame lenders’ understanding of payments received,” the creditors said in a filing.
Whether the creditors knew the transfer was a mistake or not is a critical issue in the case. There is case law in New York that allows a creditor to keep such a transfer if it didn’t realize the payment was sent in error and didn’t make any misrepresentations itself. Citigroup has said the size of the transfer means the lenders would certainly have realized the payment was a mistake.
The case is Citibank N.A. v. Brigade Capital Management LP, 20-cv-06539, U.S. District Court, Southern District of New York (Manhattan).
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