Breaking Stories

Citi’s Mistaken Payment Case Might Be In Wrong Court

The ongoing case of Citigroup‘s accidental $900 million payment to Revlon creditors may now have to be thrown out of court due to a mistake in where the lawsuit was filed, Bloomberg reported.

The issue stems from the diversity jurisdiction federal jurors have under Article Three of the U.S. Constitution, which says a case can be heard if it involves more than $75,000 and none of the plaintiffs is a citizen of the same state as the defendants, Bloomberg reported.

This case, Bloomberg reported, involves Citigroup NA, a South Dakota-based unit of Citi, suing a number of limited liability corporations including Brigade Capital Management LP, HPS Investment Partners and Symphony Asset Management, among others — all of which are considered to be of the states where their partners and members reside.

That means it’s likely they overlap in the same states as Citigroup, according to Bloomberg. Thus, they couldn’t be sued in federal court.

U.S. District Judge Jesse Furman said the court would have no choice but to throw the case out if that turns out to be true, Bloomberg reported.

However, Reuters reported that Furman has received assurances that he can move forward with the trial. Lawyers for both Citigroup and the defendants appeared confident on Thursday (Dec. 3) that the case wouldn’t have any major interferences and that most defendants could stay in the case.

The case concerns a mistaken $900 million Citigroup sent to numerous Revlon creditors, which was disputed by the creditors, who now seek to prove they’re allowed to keep the payments.

Some of the money has already been returned, although other creditors have been more actively contesting Citigroup’s demands to return it.

Last week, several financial services trade groups urged Furman to force all creditors to return the money to Citigroup. Their reasoning was that letting the creditors keep the money could undermine future cases by making banks less willing to perform wire transfers and boosting costs.

What is your reaction?

In Love
Not Sure

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *