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US banking giant Citigroup has asked a federal court to order hedge fund Brigade Capital to return $ 176 million (£ 134m).
The money is part of the $ 900 million that the bank accidentally transferred to creditors of wrestling cosmetics company Revlon.
The bank says it means sending Brigade just $ 1.5 million to cover interest on a loan that includes the hedge fund.
Citigroup blames the accidental excess of payment on an “operational error”.
In a submission to the Southern District Court of New York, Citigroup said it meant making interest payments on behalf of Revlon, but amounts exceeded 100 times the intended amount.
“When Citibank discovered the error, it immediately asked the recipients to return their money,” said America’s third-largest bank in the crash.
Citigroup was preparing to step down as the governing body for the Revlon loan when it accidentally lost roughly $ 900 million to lenders amid a bitter battle between the cosmetics company and creditors.
Some of those who received the overpayments returned the money to Citigroup, while others, including Brigade, did not return the money immediately.
Brigade would have to receive interest on a loan of $ 174.7m, according to the complaint.
It received $ 176.2 million instead and refused to return the funds “despite crystal clear evidence that the payments were made in error,” Citigroup said, noting that the money belonged to the bank, not Revlon.
Revlon has been hit hard by the coronavirus pandemic and Brigade is one of the creditors the company has filed over its debt restructuring plans.
Citigroup declined to comment further on the matter. Brigade did not immediately respond to a request for comment from the BBC.
