On Wednesday, Citigroup Inc. asked a federal court to order Brigade Capital Management LP for returning $900 million worth of shares that the bank’s loan operations staff mistakenly wired to Revlon Inc. lenders, with a troubled cosmetics giant controlled by billionaire Ron Perelman.
Citigroup filed a lawsuit on Monday in New York and, said the group was intended to make interest payments on Revlon’s behalf. Due to clerical error, the amount that is transferred to Revlon was greater nearly about 100 times more than the actual amount. Brigade Capital was supposed to be receiving $1.5 million, as interest on loan principal of $174.7 million but, received $176.2 million and now refuse to repay the excess funds, according to the complaint.
A phone conference was scheduled on Tuesday by Jesse Furman, US District Judge in New York, for discussing Citigroup’s request for a temporary restraining order. Revlon’s representative said the company did not pay any amount down the loan but, as mentioned in the lawsuit the payment was from the funds of Citigroup, rather than Revlon’s.
Brigade in context said the money should be regarded as loan repayment the contention made by Brigade was rejected by Citigroup and said, “a surprise repayment of principal could not be made under the governing credit agreement.” Citigroup is in the process of resigning from its role as administrative agent and has begun in the process of briefing regulators about the situation.