By Becky Yerak and Alexander Gladstone 

Citigroup Inc. widened its effort to claw back money it wired to Revlon Inc. lenders, suing more investment firms that say they don't believe a major financial institution sent them portions of a $900 million payment by mistake.

The bank said it wrongly sent $127.3 million to HPS Investment Partners LLC and $109.7 million to Symphony Asset Management LLC and wants a New York federal court to force them to return the money. The bank has blamed human error for the transactions, which fully paid off a loan issued by Revlon in 2016 out of the bank's own funds.

Citi had already sued Brigade Capital Management LP and on Tuesday won a temporary restraining order freezing the hedge fund's share of the loan payment, roughly $175 million.

Brigade, HPS and Symphony aren't conceding there was a mistake, suggesting the payment may have been intentional and questioning how Citi could have transferred such a huge sum in error.

In a court hearing Wednesday, Brigade lawyer Ben Finestone said the payment recipients should get a look at any documents Citi has produced for the Office of the Comptroller of the Currency and the Federal Reserve as the bank investigates the matter.

Citi lawyer Matthew Ingber said it is unthinkable that the bank would intentionally make hundreds of millions of dollars in payments to the lenders out of its own pocket. The bank is weighing its options against other lenders keeping the money, including additional lawsuits, he said.

In court papers, Citi said it intended to pay the lenders interest due under a loan issued by Revlon in 2016 but that issues with the loan-processing system caused the full principal amount to be accidentally wired.

HPS Investment and Symphony have taken the "baseless position" that Citi's overpayment "served to pay off Revlon's entire principal balance, " the bank said.

Revlon, which had $415.7 million in liquidity as of June 30, has said it didn't pay the money itself. The overpayments were made with Citi's money, not Revlon's, according to the bank.

Citi said the overpayment was discovered during its daily cash reconciliation process. It notified the lenders after realizing the mistake, according to the complaint.

Brigade, HPS Investment and Symphony have been at odds with Revlon over financial maneuvers that moved intellectual-property assets out of their reach. Citi, as the administrative agent for their loan, was also caught up in the dispute.

Revlon has been shifting brands including American Crew, Elizabeth Arden and others to new subsidiaries and pledging the assets as collateral to other creditors since last year, raising financing to stay afloat.

The lenders, acting through agent UMB Bank NA, last week launched a lawsuit against Revlon, Citi and others over those transactions, alleging they breached their lending agreements and demanding the moves be unwound.

Revlon has struggled with billions in debt, and more recently, headwinds stemming from the coronavirus pandemic's hammering of retailers.

Citi said there should be little doubt that the payments to the lenders have been made in error.

"Some of the best evidence is that not every lender who received an erroneous payment pocketed the money," the bank said.

In court papers and in court proceedings, Brigade has said some lenders aren't buying Citi's "bald assertion that the wires were sent in error" and they should be able to presume that the payments they receive are correct without having to perform a forensic inquiry.

Write to Becky Yerak at and Alexander Gladstone at


(END) Dow Jones Newswires

August 19, 2020 14:09 ET (18:09 GMT)

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