Given how many cards many of us carry, some of us have been guilty of a missing a payment or forgetting to turn auto pay off while renewing a membership. However, this story takes things to a whole new level. A few weeks back, I wrote about how travel numbers are down, but fraud may still be on the rise. However, this story seems to be bizarre on a totally different level. Citi seems to have paid out $900 million accidentally due to a clerical error. Yes, you read it right, $900 million. So what’s going over here?
Citi: $900 Million sent by Mistake
Bloomberg reports about how the whole saga unfolded. Apparently, Citigroup mistakenly wired $900 Million to the lenders of Revlon Inc. Some of these lenders are themselves embroiled in a bitter legal fight with Revlon. Citi has recouped some of the money but still has no clarity about the rest.
In the meanwhile, Revlon is fighting disputes with its own lenders. Its lenders allege that Revlon moved valuable brand assets beyond the reach of lenders. Instead, they used them as collateral for other creditors. Some of the the lenders are simply refusing to return the money they received.
But some of the lenders — including three firms who had claimed Revlon was in default and should have repaid them anyway — are refusing to return it, said the people, who asked not to be identified because the matter is private.
On the contrary, Revlon dismisses the charges as frivolous and baseless.
This group of lenders has repeatedly resorted to baseless accusations in an attempt to enrich themselves and hurt the company by blocking Revlon from exercising its contractual rights to secure the financing necessary to execute our turnaround strategy and navigate the Covid-19 crisis.
The Pundit’s Mantra
This incidents has come in the midst of Revlon’s own financial woes. Similarly, banks like Citi are also scrambling to run their business efficiently in the midst of a global pandemic and economic recession. At the moment it does seem like this battle would continue to be played out on the legal front before we see any resolution or settlement.
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Disclosure: The Points Pundit receives NO compensation from credit card affiliate partnerships. Support the blog by applying for a card through my personal referral links. This article is meant for information purposes only and doesn’t constitute personal finance, health or investment advice. Please consult a licensed professional for advice pertaining to your situation.