Our forum runs best with JavaScript enabled !

If you are Newyorker, you are lucky

View previous topic View next topic Go down

If you are Newyorker, you are lucky Empty If you are Newyorker, you are lucky

Post by 8DonCo Tue Feb 16, 2021 12:53 pm

Citibank can't get back $500 million it wired by mistake, judge rules

New York (CNN Business)After committing one of the "biggest blunders in banking history," a US District Court judge ruled that Citibank cannot recover the almost half a billion dollars it accidentally wired to Revlon's lenders.

Citibank, which was acting as Revlon's loan agent, meant to send about $8 million in interest payments to the cosmetic company's lenders. Instead, Citibank accidentally wired almost 100 times that amount, including $175 million to a hedge fund. In all, Citi (C) accidentally sent $900 million to Revlon's lenders.
Citibank filed a lawsuit in August seeking the return of its funds, but it still has not received $500 million from 10 investment advisory firms after the accidental transfer.

An exception to the rule

The law usually punishes those who spend money accidentally deposited in their accounts. Accidental transfers are common in the digital age, and wires can be paid back instantly. A Pennsylvania couple faced felony charges after spending money accidentally deposited in their account.
But New York law has exceptions to this rule, known as the "discharge-for-value-defense."

[size=18]If the beneficiary is entitled to the money and did not know it was accidentally wired, they can keep it. Revlon lenders said they believed Citibank was wiring prepayments for a loan. After all, the money accidentally wired was the exact amount "to the penny" Citibank owed them, although the loan wasn't set to mature for quite some time.
"We are extremely pleased with Judge Furman's thoughtful, thorough and detailed decision," said Benjamin Finestone, who represented two lenders, Brigade and HPS Investment Partners.


'Borderline irrational'

The court ruled the lenders were justified in believing the payment was intentional. Citibank itself did not realize the magnitude of its mistake until nearly a day later.
"To believe that Citibank, one of the most sophisticated financial institutions in the world, had made a mistake that had never happened before, to the tune of nearly $1 billion — would have been borderline irrational," the court document said.

The judge's ruling used internal chats between HPS employees as further proof the creditors had no idea the wiring was a mistake until after Citibank sent notices. In the chat, which was dated a day after the mistaken wiring, HPS employees joked about the error:


If you are Newyorker, you are lucky C7f64202b0357f04c779d805f437c5fc

If you are Newyorker, you are lucky JQrjmZ


Back to top Go down

If you are Newyorker, you are lucky Empty Re: If you are Newyorker, you are lucky

Post by ga10 Tue Feb 16, 2021 1:41 pm

Someone in Citibank will lose their jobs!

From the Accounting perspective, I wonder how they will reflect this $500M that they sent out?

I don't think Revlon would be willing to show that they had paid that $500M. So now will Revlon has to have a loan agreement with Citibank owing them $500M instead of all the other lenders?
What kind of interests would they be willing to pay since it's not their fault that Citibank paid off their loans by mistakes.


Back to top Go down

If you are Newyorker, you are lucky Empty Re: If you are Newyorker, you are lucky

Post by Sponsored content

Sponsored content

Back to top Go down

View previous topic View next topic Back to top

- Similar topics

Permissions in this forum:
You cannot reply to topics in this forum