The US banking giant filed a complaint Monday in the Southern District of New York, demanding the return of funds it said had been transferred as part of an “operational error.”
Citibank ( said in court documents he intended to send Brigade Capital about $ 1.5 million in interest payments on a loan from the hedge fund at ailing cosmetics company )Revlon (. Instead, he transferred about 100 times that amount from his own funds to the hedge fund. Other Revlon creditors also received erroneous payments totaling $ 900 million. )
Citibank, which acts as administrative agent on the Revlon loan, alleges in court documents that Brigade Capital refuses to return the money. “Brigade took the baseless position that the Citibank overpayment … was also used to pay off Revlon’s main balance in full,” the bank wrote in its complaint.
To substantiate this claim, the bank includes a message allegedly sent by Brigade Capital which says that it “is not at all clear that the funds were sent as a result of an ‘administrative error’. “
“We quickly detected our payment error and are taking appropriate action to recover these funds,” added a spokesperson contacted by CNN Business.
Unexpected deals can lead to major headaches for ordinary Americans, as banks typically require money to be returned. Depending on the state, consumers may face criminal charges if they spend money mistakenly deposited into their account. A Pennsylvania couple were charged with felony theft last year after spending $ 120,000 that their bank accidentally put into their account.
In 2016, Revlon acquired Elizabeth Arden, another American cosmetics brand, in a deal funded by a $ 1.8 billion loan in which Brigade Capital owns a stake. Under the credit agreement, Citibank collects payments from Revlon to give to lenders.
Makeup brands have struggled during the pandemic because people are spending more time at home. Revlon shares are trading at $ 7.71 per share, down from the recent high above $ 27 posted in October 2019.
In its complaint, Citibank said Brigade Capital had no reason to expect a large payment from Revlon.
“Hardly any business, let alone a struggling retail and consumer business like Revlon, would ever make such a large prepayment while facing the significant financial consequences caused by the ongoing pandemic,” the complaint states. .