₦airaland Forum

The tailor that sewn this costume, 600 years!


There is nothing super or hero about it

Citi’s $900 Million ‘Clerical Error’ Is Worst Wall Street Bungle in a Long time

https://www.bloomberg.com/amp/news/articles/2020-08-15/citi-s-900-million-blunder-raises-stakes-in-revlon-showdown?in_source=amp_trending_now_1


Citi’s $900 Million ‘Clerical Error’ Is Worst Wall Street Bungle in a Long Time
By Katherine Doherty and Jennifer Surane
August 14, 2020, 8:12 PM EDT
Updated on August 14, 2020, 9:41 PM EDT
Money was mistakenly sent to lenders suing the cosmetics giant
HPS, Brigade among firms that haven’t returned money
A man walks past Citigroup Inc. offices in New York.
A man walks past Citigroup Inc. offices in New York. Photographer: Victor J. Blue/Bloomberg
Even for Citigroup Inc., it was big money. On Wednesday, loan operations staff at the New York bank wired $900 million, seemingly on behalf of Revlon Inc., to lenders of the troubled cosmetics giant controlled by billionaire Ron Perelman.

It was a mistake for the ages -- a “clerical error,” as Citigroup told lenders -- that’s now plunged the bank into a battle between the Perelman empire and a corps of sharp-edged investment funds that have become its impatient creditors.


One financier involved likened the surprise payment to finding a fortune on the sidewalk. And, as of late Friday, several hedge funds who claim Revlon was in default on the loan were showing no signs that they’ll be giving Citigroup its money back.

The wayward transfer of nearly a billion dollars appears to be one of the biggest screw-ups on Wall Street in ages, and it’s set tongues wagging in financial markets. The question everyone is asking: how could this happen?

A spokeswoman for Citi declined to comment. A representative for Revlon said in an emailed statement that Revlon itself didn’t pay down the loan, or any portion of it.


“It’s a billion-dollar clerical error,” said Michael Stanton, a former restructuring and bankruptcy adviser. “This is probably knocking around some very big rooms at Citibank.”

Acceleration Demand
At the center of the story is an increasingly ugly battle between Revlon and a group of lenders who sued the cosmetics company and demanded immediate repayment of a term loan that Revlon has coming due in 2023. Working with UMB Bank, the lenders are claiming that Revlon shifted some intellectual property rights that had been backing their loan into collateral for new debt.

The lenders, including Brigade Capital Management, Symphony Asset Management and HPS Investment Partners, are seeking a court order forcing the return of the collateral, which includes brand trademarks. Citi, the administrative agent on the loan, was also named as a defendant in the lawsuit, although it was in the process of resigning from the agent role.


Around the same time the lawsuit was filed, the nearly $900 million -- an amount equal to the full principal value of the loan, plus accrued interest -- landed in the lenders’ bank accounts, according to people familiar with the matter. Now, Brigade, Symphony and HPS are among that are refusing to hand the cash back, said the people, who asked not to be named discussing a private matter.

“This is what the investors asked for -- they wanted their loan to be paid off,” said Bloomberg Intelligence senior distressed debt analyst Phil Brendel. “Given their suit is against Citibank as well, it isn’t clear why they would hand the money back.”

The payment was a particularly welcome surprise considering that the loan trades for less than 30 cents on the dollar, signaling that investors have dim hopes of getting a full recovery under normal circumstances.

Company's loan is trading at less than 30 cents on the dollar

Citi on Friday had yet to receive a majority of the funds back, though repayments continued to trickle in, the people said. The bank has launched an internal investigation into the matter, one of the people said.

The mistaken payment was first reported by LevFin Insights.

Read more: Revlon sued over collateral for takeover-deal loan


Revlon said it would fight UMB’s “meritless” lawsuit and that the bank doesn’t have standing to sue because it’s not the agent on the loan.

“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,” Revlon said in an earlier statement.

Revlon, controlled by Perelman’s MacAndrews & Forbes, has struggled to remain relevant and stem falling sales amid competition from Estee Lauder Cos. and a host of smaller companies using social media to lure customers. The cosmetics company has been hit hard by the pandemic and is seeking to rework its $3 billion of borrowings.

(Updates with Citi’s plans for an internal investigation in 12th paragraph.)
SHARE THIS ARTICLE

Trending Now
Business
Citi’s $900 Million ‘Clerical Error’ Is Worst Wall Street Bungle in a Long Time
August 14, 2020, 9:41 PM EDT
Markets
Berkshire Makes a Bet on Gold Market That Buffett Once Mocked
August 14, 2020, 5:38 PM EDT
Markets
Berkshire Switches Bets on Banks, Adds Wager on Barrick Gold
August 14, 2020, 6:36 PM EDT

When you use 'Quota system" to fill every available place, this is what you get.

Prof please my generator takes like 3mimutes before supplying electricity. What can I do to stop it.

Ps- it started like one month ago.

Just purchased Redmi 8 from Samtob4life, 101% legit guy.nice doing business with you bro.

Just purchased Redmi 8 from Samtob4life, 101% legit guy.nice doing business with you bro.

Okwenna:
I bought N10,000.00 from Ikeja electric online and I got just 168.50 kW/h? Please is this fair?

Is your meter a new meter?

Biggie, dis koto aye drum don do ooooo

Biggie, dis koto aye drum dom do ooooo

Most boring saturday bbn party ever!

If you get eye you go see that na rain beat am

sKeetz:
Na that dirty bed you wan sell for 30k ?

Sold

sold

SOLD

.

.

My only question is how many guests are you expecting?

I just did my wedding too and my initial budget was in the same area with yours but it doubled overnight but everything turns out perfect.

Congratulations in advance.

Im really encouraged with all this ideas.
God bless you all.

I'm thinking of doing my wedding with not more than 500k.

My people with experience your insight is needed.

This is called Kuluso in yoruba. Omo men don old ooo

I still dey look for dis movie, Girls of the Ring

Teeboy22:
Same here Q10 tho

Hw we go do am

Access it through WiFi. It worked for me that way.

Bisjosh:
I can't uninstall it. As have tried severally

Just try to access it through WiFi. It worked for me that way.

Hello house!

My BlackBerry q10 app world keep crashing anytime I tried opening it.

Any Idea on how to solve this?
Thanks

Happy new year

Hello house,

My bbq10 has bin showing error 29 when I tried to browse on glo(saying apn not verified)

Nb:its set at blackberry.net

Any one else experiencing dis?

datjohn:
Nah, its d same internet.ng.airtel.com dat u'd b using.
No special gimmicks, its legit.

Thanks
It's done