Lawyers of both parties filed an application with the US District Judge Jesse Furman in Manhattan, seeking a three-week extension to continue their talks in the hope to prevent the need for further court involvement
Citigroup to settle mistaken Revlon payment issue. (Credit: Joshua Lawrence on Unsplash)
Citigroup is reportedly in talks with hedge funds and investment firms to settle the litigation over a mistaken wire transfer of $500m related to a loan owed by Revlon, the cosmetics company that went bankrupt earlier this year.
Both parties are expected to apprise US District Judge Jesse Furman in Manhattan by 10 November, to decide on their next steps in the case, reported Reuters.
Their lawyers filed an application with the federal court, seeking a three-week extension to 1 December to continue their talks in the hope to prevent the need for further court involvement.
The Judge granting the extension, and the language used in the application suggests a potential settlement in the future, said the publication.
The move follows two months after the 2nd US Circuit Court of Appeals in Manhattan ruled that it was improper to let the creditors keep Citigroup’s money.
The US-based investment bank, as a loan agent to the cosmetics company, had accidentally paid $894m instead of $7.8m in August 2020, paying off the loan three years early.
Some recipients returned their payments after they realise the mistake, while a few asset managers refused, saying Citigroup paid exactly what was owed, reported Reuters.
The asset managers that have declined to return the payment include Brigade Capital Management, HPS Investment Partners and Symphony Asset Management.
In February last year, Judge Jesse Furman ruled that the asset managers could keep their payments, saying the prepayment was a discharge for value, after a nonjury trial.
In September this year, the 2nd US Circuit Court of Appeals in Manhattan reversed the earlier judgement, saying it was improper to let the lenders keep Citigroup’s money.