Citigroup is dropping claims against one of the entities it sued as part of an effort to get back $900 million the bank said it accidentally sent to a dozen Revlon Inc. creditors.
In a court filing Wednesday, the bank sought to voluntarily dismiss its suit against Investcorp Credit Management, which it said had received $18.9 million. Citigroup said in a statement it was "pleased to have these funds returned." Investcorp declined to comment.
Citigroup said an employee error caused it to send more than $900 million of its own money in August to a group of lenders expecting an interest payment on behalf of Revlon. The bank last month sued a dozen of the Revlon creditors — including Brigade Capital Management, HPS Investment Partners and Symphony Asset Management — who are trying to hold on to the money as payment of Revlon's debt to them.
The bank dropped its claims against one of the firms, Highland Capital Management, in late August after the money management firm returned its small share — about $244,000 — of the transfered funds. A trial on the remaining claims is scheduled for Dec. 9.
The incident was a black eye for Citigroup, which was forced to brief regulators about the situation, including the Office of the Comptroller of the Currency and the Federal Reserve. The mistake happened weeks before the Office of the Comptroller of the Currency chided Citigroup for several persistent problems with its risk controls, fining the bank $400 million and requiring it to seek government sign-off for major acquisitions.
