Litigation: Citigroup mistakenly transfers $ 900 million - hedge fund collects

Citibank building in New York: only the interest due

The major US bank Citigroup wants to force the Brigade Capital Management hedge fund to return around 175 million dollars after a wrong transfer. In contrast to many other recipients of the erroneous transfer, Brigade refuses to refund its share, argued Citigroup in the lawsuit filed in a New York court. The hedge fund was initially unable to provide any comments.

Citigroup had last week repaid an almost $ 900 million loan from the ailing cosmetics manufacturer Revlon to its creditors. Citigroup actually only wanted to transfer the interest due on behalf of Revlon. There was no intention - as happened by mistake - to repay the entire loan.

According to the lawsuit, Brigade Capital was only supposed to receive $ 1.5 million in interest on a loan held by the hedge fund. The bank transferred $ 176 million instead, which was obviously a mistake. "Citibank had no intention of transferring more money than was announced in the payment notices, nor any money of its own." When the bank discovered the mishap, it immediately asked the recipients to repay the funds. Most recipients would have repaid the money promptly.

The cosmetics manufacturer Revlon, whose sales were already shrinking before the Corona crisis, is struggling to survive. The loan remitted by Citigroup was granted in 2016 and will not be due in three years.

mik / Reuters