THE WHAT? The Revlon lenders battling with Citigroup to retain some US$500 million paid over in error have argued that they should be free to use the money as they see fit, according to a report published by Reuters.
THE DETAILS Citigroup lost its plea to recoup the funds back in February with US District Judge Furman ruling that the lenders could not have known that the funds were paid in error. However, an injunction barring them from spending the cash has been in place ever since while Citigroup appeals the decision.
Brigade Capital Management, HPS Investment Partners and Symphony Asset Management maintain the money was owed to them and they should be able to spend it. A decision is expected in the coming days.
THE WHY? The mistaken payments could cause reputational damage to Citibank, dampening client confidence. Danielle Romero-Apsilos, Spokesperson for Citigroup, told Reuters, “While many lenders have recognized the payment was in error and returned several hundred million dollars, we were forced to take other lenders to trial. Those funds sent to those lenders have been frozen by court order, and we are seeking to have that freeze continue through our appeal. We believe we have strong arguments on appeal.”