Citigroup Mistakenly Paid Revlon Creditors About $900 Million
American Bank Citigroup Inc mistakenly paid about $900 million to creditors of Revlon Inc and now asks for a refund, The WSJ writes, citing knowledgeable sources.
Creditors on Wednesday filed a lawsuit against Revlon in connection with the company's tactics about debt restructuring, and the next day received information that the loan issued in 2016 was fully repaid.
Citi management requested a refund of this money, saying that it was paid unintentionally due to an operating error.
Creditors received the full amount and accrued interest on the loan, one of the sources said. According to a second source, the money did not come from Revlon.
The American cosmetics and perfume manufacturer conflicts with lenders that provided the loan in 2016, including Brigade Capital Management LP, HPS Investment Partners LLC, and Symphony Asset Management.
The lawsuit filed on Wednesday in Federal court in New York says that the company improperly transferred intellectual property rights used as collateral for a loan in a series of transactions starting in 2019.
According to the lawsuit, the company violated loan agreements in connection with the transfer of intellectual property of several brands, including American Crew, Elizabeth Arden, and Almay, to its divisions to use them as a guarantee for other creditors.
Revlon was not the first company to suffer as a result of the coronavirus pandemic, which takes assets away from creditors to secure new funding, writes the WSJ. Among the companies that have resorted to similar tactics are Cirque du Soleil Entertainment Group, an organizer of circus shows, and Travelport Worldwide Ltd, a platform for booking flights and hotels.