Citigroup Inc. is blaming human error for its $900 million payment to lenders of the embattled cosmetics giant Revlon Inc. A bank spokesperson told media that Citibank was upgrading its loan operations platform and by mistake transmitted the payments as an employee didn’t manually select the right system options in its loan operation software.
Firms being sued to remit the payments have said that the bank hasn’t given any proper explanation of its mistake. Some of the lenders are refusing pointing out that Revlon was in default on their loans and owed them money.
In a joint letter addressed to a Manhattan judge a group of lenders have stated that the bank has declined their offer to conditionally return the money – “in exchange for a standard indemnity Citibank would pay back the funds were it later determined that Citibank was not entitled” to them.
In its court filing Citigroup asserted that the 2016 loan to Revlon allowed certain lenders to have all or a portion of their share of the loan be repurchased by Revlon. When such a loan is repurchased then Citigroup employees have to manually adjust the share of the loan held by the remaining lenders. In this case the Citibank employee committed an error by not correctly selecting the system options.
The bank stated that unfortunately the manual checks of that selection also failed to detect the mistake. Citigroup has been functioning as the agent for Revlon’s loans collecting funds from the company and distributing them to creditors. Citigroup has sued many firms seeking to recover funds and secured court order recently freezing an amount totaling more than half of what was accidentally sent pending the results of its lawsuits.
