Some of the Revlon Inc. creditors who were accidentally sent more than $900 million by Citigroup Inc. asked a federal appeals court for a rehearing, after it ruled that they had to give the money back, Bloomberg News reported. The lenders — which include Brigade Capital Management LP, HPS Investment Partners LLC and Symphony Asset Management — asked the U.S. Court of Appeals for the Second Circuit on Thursday to have a larger group of judges review the decision by a three-judge panel this month. That decision reversed a lower-court ruling that they could keep $504 million the bank mistakenly wired them in 2020. Some of the lenders had given the money back. The panel’s decision, in a case that became the talk of Wall Street, was a redemptive win for Citigroup’s main banking unit in its efforts to redress the embarrassing blunder, which forced the bank to explain to regulators how such a failure was possible. The legal dispute turns on the “discharge for value” defense, established by a 1991 New York court ruling that creditors can keep money sent to them in error if they didn’t realize the payment was a mistake. The lenders said the appellate panel’s decision “unsettled previously established New York law, such that parties in financial transactions can only wonder whether the New York state courts will adopt this court’s newly crafted exceptions to the discharge-for-value rule.”
