Revlon Ultra HD brand lipcolor is arranged for a photograph in Tiskilwa, Illinois on Wednesday, 28 February 2018. (Photo: Daniel Acker/Bloomberg) Creditors including Brigade Capital Management, HPS Investment Partners and Symphony Asset Management had said they wanted to determine whether the lenders that returned the funds had alerted Citigroup first, or if the bank “used its position as a massive financial institution to strong arm lenders,” which would refute Citigroup’s claim that the firms gave the money back without complaint.
“Defendants have a strong basis to suspect that Citibank applied pressure on those lenders that returned funds, including by threatening to discontinue important financial services and/or relationships,” the Revlon creditors said in a court filing.
Citigroup asked the judge to deny the request, arguing that the firms knew the transfers were in error. Citigroup said the creditors’ employees knew it was a mistake, ridiculed the bank for making it and ordered trustees and custodians to ignore the repayment requests.
The creditors have argued that they should be able to keep the money as “discharge for value” under a 1991 New York court ruling that says a creditor can keep the money transferred in error if it didn’t realize the payment was sent by mistake and didn’t make any misrepresentations.