Citibank can’t get back $500 million it wired by mistake, judge rules
Citibank sued in August for the withdrawal of its funds, but it still has not received $ 500 million from 10 investment advisory firms after the accidental transfer.
But there are exceptions to this rule in New York law, known as “discharge-for-value-defense”.
If the beneficiary is entitled to the money and did not know that it was accidentally wired, they can keep it. Revlon lenders said they believed Citibank was prepaying for a loan. After all, the money accidentally wired was the exact amount for “money” Citibank owes them, although the loan was not set to mature for some time.
“We are extremely pleased with Judge Furman’s thoughtful, thorough and detailed decision,” said Benjamin Finestone, representing two lenders, Brigade and HPS Investment Partners.
The court ruled that the lenders were intentionally justifying the payment. Citibank had no idea of the horrors of his mistake until about a day later.
The judge’s ruling used internal chats between HPS employees and as evidence creditors were unaware that the wiring was a mistake until after the notice was sent by Citibank. One day after accidentally wiring, in a chat, HPS employees joked about the error:
JRABINOWIT12: Definitely looks like they’ll be looking for new people for their Ops group
DFREY5: How was honey today? That was fine, except I accidentally sent $ 900 million to people who didn’t have it
DFREY5: the way to work from home. Maybe the dog hit the keyboard
Lenders cannot take money and run away. Since an appeal is a possibility, a temporary restriction order is still in effect.
Citigroup said in a statement, “We strongly disagree with this decision and intend to appeal. We believe that we are entitled to the funds and will continue their full recovery.”