Posted on 02/17/2021 10:42:42 AM PST by nickcarraway
A federal judge on Tuesday said Citigroup Inc C.N is not entitled to recoup half a billion dollars of its own money that it mistakenly wired lenders of Revlon Inc, in what he called "a banking error of perhaps unprecedented nature and magnitude."
U.S. District Judge Jesse Furman in Manhattan said the Aug. 11, 2020, transfers were “final and complete transactions, not subject to revocation.”
Citigroup plans to appeal. “We believe we are entitled to the funds and will continue to pursue a complete recovery of them,” a spokeswoman said. The blunder was the latest misstep involving internal controls at Citigroup, which federal regulators fined $400 million in October over longstanding deficiencies.
(Excerpt) Read more at reuters.com ...
Thanks for that succinct explanation. Given that set of circumstances I don’t see why Citibank wasted the time and effort trying to get it back. It would’ve been worth contacting Revlon and inquiring about it, but once they said no... All the time and $ spent taking them to court sure seems like a waste to me.
It’s interesting that the Court will apply this standard when it comes to commoditized lending but applies a very different standard when it comes to retail savings and DDA accounts.
That’s a bad look, IMO. It does sure make it seem like there are two standards; one for little guys and one for big guys. Maybe a comparison to the retail/commercial trading debacle a couple weeks isn’t accurate. But, it sure feels like something similar.
Citibank got the release for the loan that that paid off with the others in the lending syndicate. They now have to hope Revlon does not default.
BTW, it’s interesting that the principle of Revlon - Ron Perelman, billionaire and ENORMOUS funder of Democrat politics - has had something of a personal fire-sale of assets the last 12+ months. He’s sold an gigantic portion of his real estate and art portfolio and is selling his gigayacht (which he apparently loved).
They had a contract. They were owed the money (to be paid by 2023) so it would be like you paying off your mortgage early and then going back to the bank and asking them to re-instate the loan and give you the money back.
Kinda new here. Is there any way to edit the posts? I just noticed I butchered a previous comment.
It’s about reasonable expectations. He should know roughly what his paycheck is going to be, if the deposit differs drastically he has a duty to report. Citi was on the hook for this money, but there was a plan in place to pay it out over a prolonged stretch. They screwed up and paid it all at once. Since it was a legitimate debt there’s no expectation of error. Companies often pay off things early in this merger and acquisition based world where buyers don’t want to inherit liabilities.
Can’t accuse anyone here of “white racist math,” or of finding the , “right,” answer.
Wasn’t the money an investment? What is Revlon going to do with the funds, put it in a mattress? Now they have to, well, ... invest it.
How is that any different than the bank making an error in your account by a couple of decimal places? You don’t get to keep their money!
Because they actually owed that money to these people, they just weren’t required to pay it back completely yet.
They must be graduates of Oregon State's new math class instructions where 2+2 equals whatever makes you feel good.
Nope, no edit here. You can ask the admin mod to delete it for you. Just hit the abuse button on your post and explain what you did and if they would pleas remove it, no gaurantees it will happen but that is about all you can do.
The case stemmed from an incident where Citigroup, acting as Revlon’s loan agent, wired $893m to Revlon’s lenders, appearing to pay off a loan not due until 2023.
Citigroup had intended to send a $7.8m interest payment,
and blamed human error for the gaffe.
Does that mean Patricia Duff will have to reduce her yacht?
Exactly! Several years ago my bank mistakenly credited a deposit to my account, I generally really look at my bank statements a couple times a year; so I learned of the mis-applied deposit when the bank notified me that if I didn’t authorize removing that sum from my account, I could be charged with fraud; since I now knew it wasn’t actually mine.
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