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Citigroup Drops Suit Against Investcorp for Revlon Payment

Chris Dolmetsch and Katherine Doherty
·2 mins read

(Bloomberg) -- Citigroup Inc. is dropping claims against one of the entities it sued as part of an effort to get back $900 million the bank says it accidentally sent to a dozen Revlon Inc. creditors.

In a court filing Wednesday, the bank sought to voluntarily dismiss its suit against Investcorp Credit Management LLC, which it said had received $18.9 million. Citigroup said in a statement it was “pleased to have these funds returned.” Investcorp declined to comment.

Citigroup says an employee error caused it to send more than $900 million of its own money in August to a group of lenders expecting an interest payment on behalf of Revlon. The bank last month sued a dozen of the Revlon creditors -- including Brigade Capital Management LP, HPS Investment Partners and Symphony Asset Management -- who are trying to hold on to the money as payment of Revlon’s debt to them.

The bank dropped its claims against one of the firms, Highland Capital Management LP, in late August after the money management firm returned its small share -- about $244,000 -- of the transfered funds. A trial on the remaining claims is scheduled for December 9.

The incident was a black eye for Citigroup, which was forced to brief regulators about the situation, including the Office of the Comptroller of the Currency and the Federal Reserve. The mistake happened weeks before the Office of the Comptroller of the Currency chided Citigroup for several persistent problems with its risk controls, fining the bank $400 million and requiring it to seek government sign-off for major acquisitions.

Read More: Citi Fined $400 Million, Must Seek U.S. Approval on Deals

The case is Citibank NA v. Brigade Capital Management, 20-cv-6539, U.S. District Court, Southern District of New York (Manhattan).

(Updates with detail from court filing)

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