(Bloomberg) — A hard-fought battle between Citigroup Inc. and creditors of Revlon Inc. about an epic blunder in which the bank mistakenly sent the lenders nearly a billion dollars, finally concluded with a legal ruling: Case dismissed.
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The dismissal order came Monday after the latest lender holdouts agreed to return their share of $504 million that creditors had left after Citigroup’s court victory. That amount was part of an original erroneous payment of more than $900 million, part of which had already been voluntarily returned to the bank by other recipients.
Read more: Citigroup’s $500 million blunder ends in bank victory
“All pending motions are moot,” Manhattan U.S. District Judge Jesse Furman wrote in the order of dismissal. “All conferences have been cancelled. The clerk is instructed to close the case.”
It is an ordinary document closing an extraordinary case, in which the bank sued the creditors – including Brigade Capital Management, HPS Investment Partners and Symphony Asset Management – for the return of the money. Citigroup had accidentally transferred them in August 2020 while trying to pay interest as an administrative agent on a loan, a blunder that became the talk of Wall Street.
In February 2021, the lenders won a surprise court decision stating they were not required to return the money. The judge said creditors should not have expected to know the transfer was in error. Then, three months ago, a federal appeals court overturned the court’s decision. It was a major victory for Citigroup’s main banking unit in its efforts to correct the embarrassing mistake that forced the bank to explain to regulators how such a failure was possible.
Citigroup declined to comment Monday on the case’s conclusion. Quinn Emanuel lawyers representing the lenders did not immediately return messages asking for comment.
Read more: Citi loses bid to recoup huge mistake in surprise ruling
Even after Citigroup’s victory in the appeals court, the money had yet to be repaid. On December 5, the bank and lenders told Furman that three of the defendants were willing to sign an agreement ending the trial, while “substantial progress” had been made in talks with the others. On Friday, they told the judge that all 10 creditors had signed an agreement to return the money.
There is still a chance that the Dickensian case still has life in it. In his Monday order, Furman gave the parties 60 days to reopen the action “if the settlement is not consummated.”
The case is Citibank NA v. Brigade Capital Management, 20-cv-6539, U.S. District Court, Southern District of New York (Manhattan).
Citi set to drop suit over wrongful payment while creditors pay
Citi’s $500 million blunder on Revlon loan almost finally resolved
Citi’s $900 million flub spurs whims during closely watched process
–With help from Robert Burnson.
(Add judge’s quote in third paragraph, context in fourth, and details below.)
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