Citibank made the historic ‘operational’ mistake and accidentally sent $ 175 million to the Brigade Capital hedge fund. Citibank demanded the money back when he realized that he had made an erroneous transaction, but they went to court because Capital did not make the payment.
Citibank, considered the banking giant of America, made a historical mistake. Citibank was trying to restructure the cosmetics company Revlon’s debt. Citibank; He made a payment of $ 1.5 million to Brigade Capital, one of Revlon’s creditors, but accidentally made $ 175 million. Citibank quickly recognized its error and requested the refund of Brigade Capital.
Cosmetic giant Revlon acquired another cosmetics company named Elizabeth Arden in 2016. Revlon has borrowed a total of $ 1.8 billion from many different organizations to make this deal. Among the lenders to Revlon was the hedge fund Brigade Capital.
Revlon made a debt restructuring agreement with Citibank to pay off this debt. Citibank was forwarding the payments received from Revlon to the creditors in installments under this agreement. Citibank again made a historical mistake when trying to make a similar payment.
They took court
Citibank, who accidentally sent $ 175 million to Brigade Capital, took the matter to the judiciary when the money was not refunded and complained about Brigade. According to the complaint petition; Citibank alleged that it sent the Brigade hedge fund more than Revlon’s debt in installments, and demanded that the remaining amount be paid back. According to Citibank’s claim, Brigade did not want to return the incoming money, counting it on Revlon’s entire debt.
Citibank; Brigade Capital is not in favor of accepting this claim, although he says the $ 175 million payment to Brigade Capital was wrong. Because, according to CNN’s report, Brigade Capital has no evidence that this transaction is indeed a “faulty transaction”. Citibank officials, on the other hand, are calling on Brigade Capital to common sense, saying that Revlon has no financial means to make such a payment at once.
After Citibank brought the issue to the judiciary, the events were reflected in the media. Journalists trying to meet with both institutions could only get information from Citibank. According to the information obtained, the New York court issued an injunction against Brigade Capital and ordered the Capital to repay the money or not to withdraw or dispose of it until the case is due on August 31st.
Citibank, which has applied to the court for the return of the money, also conveyed the situation to the Currency Supervisor Office and the US Federal Reserve (Fed).