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The US banking giant filed a lawsuit Monday in the Southern District of New York, in search of the return of funds that it acknowledged had been transferred in an “operational mistake.”
Citibank, which acts as an administrative agent on the Revlon mortgage, alleges in courtroom paperwork that Brigade Capital is refusing to return the money. “Brigade has taken the baseless position that Citibank’s overpayment … served to pay off Revlon’s entire principal balance as well,” the monetary establishment wrote in its criticism.
To assist that allegation, the monetary establishment consists of a message purportedly sent by Brigade Capital that claims it’s “not at all clear that the funds were sent as a result of ‘clerical mistake.’ “
The courtroom positioned a preliminary injunction in direction of Brigade Capital on Tuesday, ordering it to each pay back the money or to not withdraw or eradicate it until a courtroom look on August 31.
Brigade Capital declined to comment when contacted by CNN Business. Citibank acknowledged Brigade Capital’s actions are “unconscionable” and requested the courtroom to stress the return of the money.
“Any other outcome would threaten the stability of the banking system [and] reward bad actors that try to capitalize on operational mistakes,” the monetary establishment acknowledged in its criticism.
“We quickly caught our payment error and are taking the appropriate actions to recover those funds,” a spokesperson added when contacted by CNN Business.
In 2016, Revlon acquired Elizabeth Arden, one different American cosmetics mannequin, in a deal financed by a $1.eight billion mortgage of which Brigade Capital holds a slice. Under the credit score rating settlement, Citibank purchase funds from Revlon to give to the lenders.
In its criticism, Citibank acknowledged that Brigade Capital had no trigger to depend on a large price from Revlon.
“Virtually no company, let alone a distressed retail and consumer company such as Revlon, would ever make such a substantial prepayment while dealing with the significant financial consequences caused by the ongoing pandemic,” the criticism reads.
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