Citigroup (NYSE: C) apparently trying to handle a $ 900 million bug.
Several media outlets report that the sprawling bank accidentally wired that amount to several companies that provided loans Revlon (NYSE: REV). According to one Bloomberg report, “cited” people with knowledge of the case “, the bank asked for all the money back, but so far less than half of it has recovered.
At least three recipients – named by Bloomberg as Brigade Capital Management, HPS Investment Partners, and Symphony Asset Management – have refused to return what they received from Citigroup, according to the article.
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The bank attributed the payment to a clerical error. It declined to comment further on the matter.
Some entities receiving the funds are creditors of Revlon, a struggling cosmetics company that has incurred significant amounts of debt. Apparently, the money provided by Citigroup covers the capital plus interest accrued for the amounts borrowed by the recipients Revlon.
In another interesting twist to the story, a group of creditors submitted the cosmetics specialist on Wednesday. Brigade, HPS, and Symphony were involved in this action. The suit alleges that Revlon transferred assets as collateral to other entities to keep them out of the reach of lenders (who were likely to be able to take them in in case of a loan default).
All told, those creditors lent $ 1.8 billion to the company in 2016 to help finance the purchase of Elizabeth Arden, an urban makeup brand. Citigroup was the agent for that arrangement, and was named a suspect in the lawsuit.
In comments to The Wall Street Journal, an unnamed spokesman for Revlon described the legal action as “meritorious” and consisting of “baseless allegations.” It has plans to challenge it strongly in court.
