Citigroup is suing Revlon after making a US$900 million blunder the former made two years ago, Bloomberg said in a recent report. Citi had accidentally sent US$900 million to Revlon lenders in August 2020 and only managed to recoup US$400 million from some of the recipients. However, the other lenders refused to return the remaining US$500 million. According to previous reports by The Wall Street Journal , the other lenders include Brigade Capital Management LLC, Symphony Asset Management LLC and HPS Investment Partners LLC.

Citi had erroneously fulfilled an approximately US$900 million debt that the cosmetics company was not due to pay until 2023. In doing so, it also delivered "an unexpected windfall to lenders", WSJ  previously reported. In 2021, the bank's request to recoup the remaining US$500 million was declined by a federal judge, WSJ reported then and fast forward a year later, Revlon filed for bankruptcy , making it tricky for Citi to claw back its money. Nonetheless, Revlon hinted that it might go up against Citi's status as a creditor and Bloomberg said this move prompted the bank to file a suit against Revlon last Friday.

Citi is requesting for Revlon's bankruptcy judge to "dispel any doubt about its right to repayment under the Revlon term loan", Bloomberg said. Citi's lawyers explained that because the bank was under no obligation to pay Revlon's debt, denying it rights as a creditor would "let Revlon escape liability for its own debt obligations".

(Read also:  Why bankruptcy is hardly the end for Revlon )

Citing court papers, Bloomberg reported that Citi was unaware of its status as a creditor being challenge until days before Revlon filed for bankruptcy in June this year. After that happened, Revlon and some of its creditors reportedly "refused to acknowledge" Citi's rights as a secured lender in Revlon's bankruptcy financing package, Bloomberg said.

Meanwhile, WSJ said Citi previously attributed the blunder to human error, claiming that recipients of the US$900 million knew immediately that they were paid in error. It has also sued 10 investment firms that refused to pay the money back, including Brigade, Symphony Asset Management, and HPS Investment Partners.

The cosmetics giant filed for bankruptcy amidst liquidity constraints brought on by "continued global challenges", including supply chain disruption and rising inflation, as well as obligations to its lenders. The brand housed renowned brands including Elizabeth Arden and Ed Hardy, and if the bankruptcy is approved, Revlon is expected to receive US$575 million in debtor-in-financing from its existing lender base. Along with its existing working capital, Revlon previously said the money will help the company "manage through current macro-economic challenges and in turn enable it to better serve customers".

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