(Bloomberg) — A hard-fought battle between Citigroup Inc. and Revlon Inc.’s creditors over an epic blunder that saw the bank inadvertently send nearly $1 billion to lenders was eventually capped with a legal declaration: case dismissed.
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The sacking order came Monday after the last of the holdouts among the lenders agreed to repay their share of $504 million left by the creditors following Citigroup’s court victory. This sum was part of an original default of more than $900 million, some of which had already been voluntarily returned to the bank by other recipients.
Read more: Citigroup’s $500M blunder ends in victory for bank
“Pending motions are contentious,” US District Judge Jesse Furman wrote in Manhattan in the recall order. “All conferences have been cancelled. The clerk is ordered to close the case.”
It’s an ordinary document that closes an extraordinary case in which the bank sued creditors — including Brigade Capital Management, HPS Investment Partners and Symphony Asset Management — to have the funds returned. Citigroup mistakenly transferred her in August 2020 when she tried to make an interest payment on a loan as an administrative agent, a mistake that became a talking point on Wall Street.
In February 2021, the lenders won a surprise court decision that they did not have to return the money. The judge said creditors should not have known the transfer was a mistake. Then, three months ago, a federal appeals court overturned the trial court’s decision. It was a major victory for Citigroup’s main banking unit in its efforts to redeem the embarrassing mistake that forced the bank to explain to regulators how such a failure was possible.
The story goes on
Citigroup declined to comment Monday on the case’s closure. Lawyers for Quinn Emanuel, who represented the lenders, did not immediately respond for comment.
Read more: Citi loses bid to make amends for massive mistake in surprise decision
Even after Citigroup’s victory in the Court of Appeals, the funds still had to be repaid. On December 5, the bank and lenders told Furman that three of the defendants were ready to sign an agreement to end the litigation, while talks with the others had made “substantial progress.” On Friday, they told the judge that all 10 creditors had signed an agreement to return the money.
There’s still a chance the Dickens case still has some life. In his Monday order, Furman gave the parties 60 days to resume the lawsuit “if the settlement is not consummated.”
The case is Citibank NA v. Brigade Capital Management, 20-cv-6539, US District Court, Southern District of New York (Manhattan).
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–Assisted by Robert Burnson.
(Added the judge’s quote in the third paragraph, context in the fourth and details below.)
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