U.S. Citigroup made a loan to cosmetics company Revlon that resulted in the erroneous over-remittance of $504 million. U.S. District Court Judge Jesse Furman ruled Tuesday, Feb. 16, that the 10 asset managers representing the lenders do not have to return the money that Citi mistakenly over-remitted when it paid interest on the loan last August.
According to the judge, the recipients should not be considered at fault for the transfer. Citi mistakenly remitted more than $900 million before some of the lenders returned the overpayment.
After sending the money out, Citibank did not realize it had made a serious mistake until the next day. The court documents state that it would be unreasonable for Citibank, one of the world’s most sophisticated financial institutions, to make a mistake that it had never made before and that was nearly $1 billion in size.
CNN reported that Citibank was the loan agent for Revlon, which was supposed to pay about $8 million in interest to creditors for Revlon at the Time, but accidentally helped Revlon pay back $900 million in loans; although some creditors returned the money, $504 million still did not return to Citi, so Citibank filed a lawsuit to have its funds returned.
In a statement, Citigroup said, “We strongly object to this judgment and intend to appeal. We believe we are entitled to the money back and will continue to recover the full amount.”
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