Creditors of Revlon Inc. that obtained in excess of $500 million in inadvertent payments by way of Citigroup Inc. want a judge to let them access the funds that he has determined can remain in their hands, Bloomberg reported.
Citigroup sued 10 asset managers for the Revlon creditors to make them give back the $504 million that it had mistakenly sent them. U.S. District Judge Jesse Furman put a hold on the funds as the disagreement continued.
The bank sent over $900 million to the asset managers in total. Some entities reportedly returned the funds with the stipulation they be treated like the others and that the bank would return the money in the event that the bank was not successful with the case, Bloomberg reported, citing unnamed sources.
The asset managers want the judge to remove the freeze on the funds, as they contend they obtained precisely the funds that they were owed and should have the ability to harness the funds in the manner they see fit.
Citibank will request on Friday (April 9) that the judge keep the freeze until the appeal’s result is determined, the news outlet reported.
“While many lenders have recognized the payment was in error and returned several hundred million dollars, we were forced to take other lenders to trial,” Danielle Romero-Apsilos, a Citigroup representative wrote in a statement, per Bloomberg. “Those funds sent to those lenders have been frozen by court order, and we are seeking to have that freeze continue through our appeal. We believe we have strong arguments on appeal.”
The bank wrote in court filings per the report that the funds represent a “lottery-like windfall” to the entities that loaned Revlon money. In the event those funds are sent out to investors throughout the globe, they might not be able to be recouped, or able to be found, the bank contends in court filings, per the news report.
The defendant’s representation, Quinn Emanuel Urquhart & Sullivan LLP, would not provide a response to the case, Bloomberg reported.
The news comes after Furman ruled that 10 asset managers for the lenders don’t have to give back the $504 million that Citibank said it erroneously sent in August in an attempt to pay interest.
“The transfers matched to the penny the amount of principal and interest outstanding on the loan,” Furman said in his decision, as per a previous Bloomberg report.
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