(New York) The American bank Citigroup should be able to recover the more than 500 million US dollars that it had inadvertently paid to creditors of Revlon, an appeals court decided on Thursday, invalidating a previous decision.
Posted at 8:42 p.m.
The establishment had transferred, “by mistake” according to him, 900 million US in August 2020 to several creditors of the cosmetics manufacturer when he simply wanted to pay them interest in the amount of 7.8 million US.
Citigroup quickly realized its blunder and then asked the beneficiaries to repay the sums received. Some not wanting to do so, Citigroup took the case to court to recover the missing 504 million US.
In the first instance, a judge found that the beneficiaries of the accounting error could keep the money since they were owed them anyway, that they had not made false declarations to fool the sender and that they were not immediately notified that the payment had been made in error.
One of the three judges who handed down the appeal decision, Michael Park, pointed out in his opinion that the creditors had in fact no right to keep the money, in particular because the repayment of their loans was not due for three year.
“Today’s decision reaffirms our long-standing belief that these mistakenly transferred funds must be returned under the law, as well as ethics,” the bank said in a message sent to AFP.
“While Citi has taken steps to reduce the likelihood of such an error in the future, today’s decision brings welcome stability and supports the concept of cooperation necessary for a well-functioning syndicated loan market. “, added the establishment.
The case had led American authorities to impose a fine of 400 million US dollars and unusually strict control measures on Citigroup in the fall of 2020, which they accused of poor risk management.