The Business Times

Citigroup, funds in talks to end lawsuit over errant US$500m Revlon payment

Published Fri, Nov 11, 2022 · 08:10 AM

CITIGROUP is in talks to end litigation against hedge funds and investment firms that it mistakenly paid about US$500 million on a loan owed by Revlon, billionaire Ronald Perelman’s now-bankrupt cosmetics company. Both sides had been expected to apprise US District Judge Jesse Furman in Manhattan on their next steps in the case by Nov 10.

In a letter filed on Thursday in Manhattan federal court, their lawyers requested a three-week extension to Dec 1 to “allow the parties to continue discussions that would avoid the need for further court involvement.”

Such language often suggests that a settlement may be forthcoming. Furman granted the extension.

Citigroup declined to comment. Lawyers for the bank and the lending group did not immediately respond to requests for comment. The letter was filed two months after a federal appeals court said it was improper to let 10 asset managers including Brigade Capital Management, HPS Investment Partners and Symphony Asset Management keep Citigroup’s money.

Citigroup, acting as Revlon’s loan agent, had in August 2020 accidentally used its own money to pay off a US$894 million loan three years early.

Some recipients returned their payments after realising the bank’s mistake. Others refused, saying Citigroup paid what they were owed and noting that Perelman had bailed out Revlon before.

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Furman ruled in February 2021 that the asset managers could keep their payments, but the 2nd US Circuit Court of Appeals in Manhattan said it would improperly leave them with a “huge windfall” and returned the case to Furman. REUTERS

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