Citigroup in talks to recoup errant $500 million Revlon mortgage fee By Reuters

By Jonathan Stempel

NEW YORK (Reuters) -Citigroup Inc is negotiating the return of about $500 million it mistakenly paid a bunch of hedge funds and funding companies on a mortgage owed by Revlon Inc, the now-bankrupt cosmetics firm managed by billionaire Ronald Perelman.

In a Thursday submitting in Manhattan federal court docket, attorneys for the financial institution and the lenders mentioned they’ve been discussing a “consensual decision” to finish Citigroup (NYSE:)’s August 2020 lawsuit to recoup the mistaken fee.

Whereas no settlement has been reached, the attorneys mentioned “materials phrases” of a settlement would supply for the return of Citigroup’s cash, with the financial institution transferring curiosity and amortization funds it started receiving in early 2021.

Talks to finish the lawsuit had been disclosed on Nov. 10. The attorneys requested U.S. District Decide Jesse Furman to allow them to replace the standing by Dec. 5.

Citigroup, which was Revlon’s mortgage agent, had unintentionally used its personal cash in August 2020 to repay the corporate’s $894 million mortgage three years early as a substitute of paying $7.8 million in curiosity.

The financial institution blamed human error, and a few recipients returned their funds.

However 10 asset managers together with Brigade Capital Administration, HPS Funding Companions and Symphony Asset Administration refused, saying the financial institution paid what they had been owed.

Furman sided with them in February 2021, main Citigroup to decrease beforehand reported revenue to mirror $390 million of added authorized bills.

However the federal appeals court docket in Manhattan overturned that ruling in September, saying it could depart the group with a “enormous windfall” at Citigroup’s expense.

Revlon filed for Chapter 11 chapter safety on June 15.

The case is In re Citibank August 11, 2020 Wire Transfers, U.S. District Courtroom, Southern District of New York, No. 20-06539.