Legal

Revlon Creditors Ask Judge To Allow Expert On Citi's $900M Error

Several Revlon creditors want to enlist an expert to share his opinion on whether they should have known that a $900 million payout from Citigroup was a mistake, Bloomberg reported.

On Wednesday (Sept. 16), the creditors, who were sued by Citigroup to recover the money, inquired to U.S. Judge Jesse Furman whether they could present testimony from an unnamed expert with over 40 years of experience in the corporate loan market. This individual, Bloomberg reported, served as a senior executive with numerous financial institutions and had a hand in managing global loan businesses.

The payout in question, which was about 100 times larger than the interest payment the creditors expected, was issued last month and then quickly retracted as Citigroup scrambled to correct what it called a mistake. The bank filed an injunction to temporarily freeze a $175 million payment sent to Brigade Capital Management, and it filed lawsuits against 11 creditors to get the money returned. The funds were paid from Citigroup's own accounts rather than Revlon's.

There's a trial scheduled for November to resolve the matter.

The filing, according to Bloomberg, said the aforementioned unnamed 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."

Some of the issues that this expert could clear up involve whether or not the creditors knew the payments were a mistake. A case law from New York specifies that creditors can keep a transfer if they didn't know it was made in error.

In Citigroup's opinion, the size of the transfer should have clearly indicated that it was a mistake, Bloomberg reported.

Brigade Capital was at the forefront of the opposition to the whole affair, refusing to return the payment, claiming doing so would damage its investments. The spat comes after years in which Brigade worked alongside Citigroup on projects such as raising over $1 billion in new loans.

——————————

NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

TRENDING RIGHT NOW