Citibank mistakenly transferred millions that it will not be able to recover now after the judge’s ruling Univision Money News

In total, the Finance giant Citigroup (Citi Bank) She accidentally transferred nearly $ 900 million, which she sought to recover through a lawsuit. However, a large portion of this amount will not be returned after the judge’s ruling.

The case of the court in question focuses on Payments totaling nearly $ 500 million that Citigroup sent in August 2020 to 10 financing companies that were part of an installment loan for cosmetics company Revlon.

It all started when Citi sent in, a loan officer by mistake For members of the consortium About $ 900 million in principal funds in lieu of interest payments.

Citi was looking to send an interest-only payment on the Revlon loan, about $ 8 million, but instead sent the entire principal amount. Citi quickly realized the mistake, but was rejected by lenders, including Allstate Investment and Graywolf Loan Management. Some lenders refused to repay around $ 500 million.

Judge Jesse Foreman said these entities said they believed Revlon was paying off the loan early.From the Southern District Court New York.

In a 105-page ruling, Foreman said, because the defendants in the case believed “in good faith and with sufficient cause” that the payments were for the entire Revlon loan, “clients of the accused are entitled to keep the money.”

This does not end here

The referee, reported by Agence France-Presse, classified the incident as: “One of the biggest mistakes in banking history.”

The judge explained that if the lenders who took the money had Assuming that “Revlon canceled the term loan as early as borrowers sometimes do” or that “Citibank or Revlon have erroneously transferred more than $ 900 million.” (Something no bank has done before), It would be illogical to choose the last option. “

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Forman said the lenders’ assumption of repayment makes sense given that Revlon has been known to be under financial pressure due to the Coronavirus pandemic.

In his ruling issued in 1991, the judge indicated that he had ruled “unequivocally” that New York law states that “banks that conduct wire transfers to creditors in good faith run the risk of loss if a mistake is made,” he said.

However, he noted that the defendants “are still not necessarily free to do what they want with money,” and indicated the possibility of an appeal.

Citi, in fact, plans to appeal the decision. “We believe we are eligible to receive the funds and we will continue to seek a full recovery from it,” a City spokeswoman told the agency.

Myrtle Frost

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