Revlon stock drops after Citibank wins appeal in $500m transfer deal

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BalkanCat

Update 4:35 p.m.: Update shares, add Citi statement.

Revlon (NYSE: REV) fell 4.2% after a federal appeals court rules that a group of cosmetics company creditors must return $500 million that was accidentally sent to them by Citibank (VS).

A three-judge panel overturned the district court’s decision and sent the case back to the district court, according to the ruling seen by Seeking Alpha.

Citigroup (C) initially lost the case in February last year in its effort to recover $900 million it mistakenly transferred to Revlon (REV) lenders.

Citi (C) commented in a statement emailed to Seeking Alpha on Thursday on the court’s decision.

“Today’s decision reaffirms our long-standing belief that these erroneously transferred funds should be returned under the law, as well as ethics,” Citi wrote in the statement. “While Citi has taken steps to reduce the likelihood of such an error in the future, today’s decision provides welcome stability and confirms the concept of cooperation necessary for the syndicated loan market to function properly.”

The defendants – including Brigade Capital Management, HPS Investment Partners and Symphony Asset Management along with seven others – claimed they were owed payment since Revlon (REV) was in default.

Citigroup (C) sued Brigade Capital Management in August 2020 to return its share of more than $900 million that the bank mistakenly transferred to Revlon’s lenders.

The bank said the transfer of the money to Brigade and other lenders on August 11 was the result of a clerical error.

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