Citigroup files for longer-lasting fund freeze over botched Revlon payment

By Becky Bargh | 4-Mar-2021

The investment bank is appealing a judge’s decision that will allow lenders to keep the $500m it paid by accident

Investment banking group Citigroup has asked a US judge to extend a freeze on some US$504m that it mistakenly wired to a band of Revlon lenders.

According to Reuters, Citigroup filed a motion last night asking Manhattan US District Judge Jesse Furman to convert his temporary freeze over the funds to a longer-lasting injunction.

Citigroup, helmed by chief executive Michael Corbat, is appealing his decision that the ten Revlon lenders can keep the money it accidentally wired to them last year.

Citigroup is arguing that if the lenders are free to distribute the funds to their investors it would make it “very difficult, if not impossible” to recover the funds.

The saga began in August last year during a wire transaction that was supposed to pay off a small interest payment on Revlon’s behalf.

However, in a technical blunder, its Citibank unit used its own money to repay the cosmetics company’s roughly $894m loan in full.

The group was able to recall around $390m, however, Furman’s ruling on 16 February said Brigade Capital Management, HPS Investment Partners and others need not repay the remaining cash.

Lenders are expected to give a formal opposition on 12 March.

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