Citigroup Inc. paid nearly $900 million in error to Revlon Inc. lenders as a result of clerical error and desires its money-back, Bloomberg News reported.
While some of Revlon's lenders returned the cash, other medication is refusing to come back the cash to Citi once they received funds from the bank comparable to the quantity of a Revlon loan plus interest, sources told the news service.
Lenders who sued Revlon were surprised to understand Thursday (Aug. 13) they were fully repaid on a loan issued in 2022, the sources said. Citi executives asked for the money back, saying it was paid inadvertently due to an operational error, sources said.
Revlon is involved with a legitimate dispute with a few of its lenders. A lawsuit filed Wednesday in U.S. District Court in Ny accused Revlon of moving valuable brand assets beyond the reach of lenders in order to use them as collateral for other creditors. The complaint alleged the cosmetics company had broken its loan agreements by siphoning off intellectual property including those for American Crew, Elizabeth Arden, Almay along with other brands, transferring them to subsidiaries as collateral.
Citi and Revlon declined to comment.
Revlon has been fighting with Brigade Capital Management LP, HPS Investment Partners LLC and Symphony Asset Management, lenders holding the borrowed funds.
\”This number of lenders has repeatedly resorted to baseless accusations in an attempt to enrich themselves and hurt the organization by blocking Revlon from exercising its contractual rights to secure the financing necessary to execute our turnaround strategy and navigate the Covid-19 crisis,\” Revlon said within an earlier statement.
Revlon, saddled with nearly $3 billion of debt, has been hurt by the pandemic and it is seeking to rework its borrowings.
Last month, an outburst in fixed-income trading revenue helped Citi turn a profit during the second quarter (Q2), despite credit losses and weakness in the consumer banking division.
Citigroup reported a 68 percent begin fixed-income trading revenues for Q2, which beat analyst estimates for earnings and revenue.
The big rise in fixed-income trading revenue, coupled with a rise too in investment banking activity, pushed Citi's revenue for that quarter 5 percent higher to $19.8 billion, up from $18.8 billion throughout the same period last year.
Still, Citi's Global Consumer Banking division took a 10 percent hit in revenue, falling to $7.3 billion in Q2, down from $8.1 billion in the same period a year ago.
Net credit losses surged 12 percent to $2.2 billion for the quarter, with Citi reporting it had provided some type of relief or adjustment to 2 million credit card holders.
