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Citigroup lost its $ 500 million repayment lawsuit that it wrongly transferred to a group of asset managers that funded Revlon to acquire one of its competitors.
The bank intended to transfer about $ 8 million, representing the interest owed on the loan, but mistakenly transferred $ 900 million, which equals the total loan amount plus interest.
The bank was able to recover $ 400 million of the transferred amount, while the remaining $ 500 million was not approved by the judge.
According to the judge, it is unreasonable for a major bank like Citi to make an error like what happened, which gives a compelling reason that the transfer of the amount was intentional.
Revlon’s lenders said they believed Citibank was making prepayments to secure a loan, especially since the amount transferred in error was the “exact amount” Citibank owed them, even though the loan was not due. not specified.
The court ruled that the lenders were correct in believing the transfer was intended. Citibank didn’t realize the extent of its mistake until almost a day later.
The court ruling said “the belief that Citibank, one of the world’s most advanced financial institutions, had made an unprecedented error of nearly $ 1 billion would have been illogical.”
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