NEW YORK - Citigroup Inc is close to getting back about $500 million that was accidentally paid to 10 Revlon Inc., with three on the brink of returning their payouts and others making substantial progress toward a resolution, a court filing shows.
Citigroup, as Revlon's loan agent, accidentally used its own money in August 2020 to prematurely pay off a $894 million loan that was owed by billionaire Ronald Perelman's now-bankrupt cosmetics company.
Some recipients returned their payouts after realizing the mistake, blamed by Citigroup on human error, but the 10 lenders refused, saying the bank paid what they were owed.
The potential settlement was discussed in a joint letter by lawyers for Citigroup and the lenders, which include hedge funds and investment funds, filed late Monday night in Manhattan federal court.
A resolution would end more than two years of litigation by Citigroup against Brigham Capital Management, HPS Investment Partners, Symphony Asset Management and the other lenders, according to a blunder that the bank's Chief Executive Jane Fraser called a massive unforced error. Three lenders have indicated they are ready to sign an agreement to end the litigation, while the others are still working with other parties before they commit to a date for returning their payments, according to the letter.
The parties have a mutual interest in resolving the time frames to enable resolution, the letter said. Both sides proposed to update the status of the talks soon.
In September, a U.S. appeals court in Manhattan said the lenders did not deserve a huge windfall and overturned a February 2021 ruling by a federal district judge who said the lenders could keep their payouts.
After the earlier ruling, Citigroup had lowered its previously reported profit to reflect $390 million of additional legal expenses.
The lawyers said last week that the terms of a potential settlement called for Citigroup to recoup its money and transfer some interest and amortization payments.
The case is In re Citibank August 11, 2020 wire transfers, U.S. District Court, Southern District of New York, No.