Published 12:47 IST, August 17th 2020
Citibank accidentally wires $900 million to Revlon lenders in 'clerical error'
Citibank has now appealed Revlon for reimbursement from Revlon, who had largely been in default on its mortgages but hasn't received any portion of funds back.
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On August 16, mortg operations employees at Citigroup Inc., via Bank of New York’s lending operations staff wired $900 million to lenders mistakenly for Revlon Inc. Citigroup advised lenders that it was a “clerical error” on behalf of cosmetics firm run by Ron Perelman. Citigroup has w appealed for reimbursement from Revlon, who had largely been in default on its mortgs, according to reports. In one of greatest errors of all times, financial institution has plunged into a battle with Revlon as it was unable to recoup any small portion of funds back.
According to reports, three lenders that Citi group accidentally provided loans on behalf of Revlon namely Brigade Capital Manment, HPS Investment Partners, and Symphony Asset Manment have refused to pay back. Some of entities are creditors of Revlon. Citigroup’s funds included principal plus accrued interest for amounts lenders had loaned to financially struggling Revlon. As per a separate report, entities named Brigade, HPS, and Symphony have also filed a lawsuit against cosmetic firm. In 2016, se creditors had loaned out over $1.8 billion to finance acquisition of Elizabeth Arden.
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[ United States Securities and Exchange Commission Report. Screenshot Credit: https://sec.report/Document/0001157523-20-001187/a52267012.htm]
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Lawsuit “meritless"
A US broadcaster quoted a Revlon spokesman as saying that lawsuit filed by creditors was “meritless" and contained “baseless accusations”. Furr, he alleged that Revlon would challenge legal action in court. A former restructuring and bankruptcy adviser, Michael Stanton, was reported saying that one of biggest errors on Wall Street was worth some billion-dollar. He added, that clerical error might have an impact on some big rooms in Citi. While bank has yet to comment on matter, it has launched an internal investigation into incident, as per reports.
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Revlon said in a statement that a group of lenders has repeatedly used baseless accusations in an attempt to enrich mselves and harm business. It added that y achieved this by preventing Revlon from exercising its contractual rights to obtain financing necessary to execute our turnaround strategy and navigate Covid-19 crisis.
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12:48 IST, August 17th 2020