An investment fund refuses to return more 158 million francs after having benefited from a transfer from Citibank “by mistake”.
The transfer was originally intended to pay interest owed by Revlon to creditors, a transaction handled by Citibank.
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Citibank filed a complaint Monday against an investment fund that refuses to return part of the 900 million dollars (815 million francs) transferred “by mistake”, according to the American bank, to several creditors of the cosmetics manufacturer Revlon last week .
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The establishment quickly realized its accounting blunder, committed on August 11, and asked the beneficiaries to repay the sums received. What some did not deign to do. Brigade Capital Management in particular “refused to return its share and converted around 175 million dollars (158 million francs) for its own use”, deplores Citibank in the complaint filed Monday with a New York court.
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Not enough cash
The transfer was originally intended to pay interest owed by Revlon to creditors, a transaction handled by Citibank. But, according to the complaint, Brigade estimated that the sum disbursed in error due to problems with the system managing the loans, more than 100 times the amount of the expected payment, was used to repay its entire loan to Revlon. However, the company still has three years to repay its debts and does not currently have the cash to do so, says Citibank in its complaint, noting that the money disbursed in excess came from its own funds.
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Additionally, Brigade “was well aware that virtually no company, let alone a struggling consumer item company like Revlon, would make such a large prepayment while facing the major financial consequences caused by the pandemic.” notes the document. Brigade is part of a group of creditors led by UMB Bank who filed a lawsuit against Revlon on August 12, the day after Citibank’s “mistake”, over how the cosmetics maker had restructured its debt.
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