“The transfers matched to the penny the amount of principal and interest outstanding on the loan,' Furman wrote. In his 101-page ruling, Furman said the outcome of the case was surprisingly straightforward, even if it may not seem like the fairest result.

“Citi has a reasonable chance on appeal, but this outcome will create some stiff headwinds,' Talley said.Ĭitigroup’s shares pared gains on the verdict and finished Tuesday up less than 1%. It won’t be easy to appeal the court decision, said Columbia Law School professor Eric Talley, an expert in corporate law and finance. They can keep the money, pending an appeal, but can’t spend it, the judge said. They argued that the 11 August 2020 payment-one of the biggest banking errors in recent memory-settled Revlon’s debt to them under a 2016 term loan and didn’t look like a mistake when it arrived. The asset managers have been locked in a battle with billionaire investor Ronald Perelman’s struggling cosmetics company Revlon over its May 2020 restructuring. The New York-based company is also undergoing a leadership change, with incoming chief executive officer Jane Fraser set to take the reins on 1 March.įor the lucky recipients of the multi-million-dollar transfer, the decision is a boon. The decision is the latest blow to Citigroup, which is in the midst of a years-long effort to update its underlying controls and technology after regulators slapped it with a $400-million fine for deficiencies in both areas last year. As Furman framed his opinion, the legal rule was clear: under New York law, a creditor can keep a mistaken payment as long as he has “no knowledge' that it was sent in error. The outcome is fascinating as an instance of strict judicial rule-following.

“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 $1 billion would have been borderline irrational,' wrote Furman, who presides in Manhattan. The judge, Jesse Furman of the southern district of New York, said the recipients shouldn’t have been expected to know that the transfer, which totalled more than $900 million before some lenders returned their share, was an error. The recipients of this largesse include Brigade Capital Management, HPS Investment Partners and Symphony Asset Management. However, instead of the interest amount that was due, the whole loan amount got transferred as a result of a back-office blunder. Citigroup had made the transfer to fulfil its role as Revlon’s “loan agent'.

Global transfer citi not accepted