I tend to agree that Citigroup has the better argument, but this is weirdly lopsided coverage. Revlon's bank repaid Revlon's loan using money Revlon didn't have. Oops! But that's not clearly a reason for the lender to return the repaid loan.
What happens if I pay one of my bills and realize later that it would be more convenient for me to have paid less so I'd have more money for whatever else? How do I claw back the amount I now wish I hadn't paid?
Agreed. The previous article posted to HN was better IMO.
I feel it’s relevant that Revelon’s loan hadn’t actually come due yet.
I think it’s also relevant that Citigroup didn’t send Revelon’s money, they sent Citigroup’s money. “Somebody at Citigroup owes us, so any money coming from that general direction is ours” feels pretty flimsy to me.
It’s also relevant that Revelon is not looking so healthy, and is widely expected to go into bankruptcy protection before repaying Brigade.
But I think Brigade’s math is pretty easy here - gambling a 15 million on lawyers for even a small chance to (effectively) make 175,000 million might be a good bet.
I don't think it's material which department in citigroup owns which account. Citigroup is responsible for all the money as a single entity.
When you work in a company and pay a supplier, you don't get to chase the supplier and ask for refund saying you cut a check from the wrong company account. This is down to your company, it's your company problem.
A company is a single entity, but a bank is representing many entities, so I do think it matters which entity the bank was representing at that point in time.
If I overpaid a contractor by mistake, I don’t think that contractor should get to keep my money under the logic that somebody else who uses the same bank also owed that contractor money.
Your contractor contract should have a clause to specify that he must return overpaid money. My employment contracts all had that. This helps dealing with this sort of issues :)
Citigroup, Revlon and Bridage certainly have long complicated contracts on that loan, that should cover what to do. Well, I really hope they thought of covering the basics while drafting a billion dollar loan.
If I owe you money and John Smith knocks on your door, hands you a pile of money, and says “this is from bradleyjg to pay off his debt” I think it is entirely reasonable to rely on that representation. You lent money, it was paid back by the borrower’s agent, the transaction is over.
Except they didn't say that. They sent it by accident. And there's decades of case law siding with banks against "bank error in your favor" situations.
There's no indication in any reporting that the money was sent with a note or memo saying "this is to pay the full Revlon debt". To all known facts, they simply sent the money.
> Revlon's bank repaid Revlon's loan using money Revlon didn't have. Oops! But that's not clearly a reason for the lender to return the repaid loan.
I think the point about it being money Revlon didn't have is important. The money came from the bank's accounts, not Revlon's. The owner of that account (Citigroup) had no debt owed to Brigade, so I don't think the bill pay analogy is quite apt. This seems like nothing more than an accidental transfer, which happens all the time and are always reversed.
Citigroup is the only party responsible for paying the bill. They do not themselves owe the money, but any legitimate payment would come from them. So, as the lender, what's the difference?
Revlon had not released the funds for Citigroup to pay the amount due and don't have the funds to repay the loan. Revlon's creditors had sued them the day before. Citigroup were just an intermediary and shouldn't have transferred any funds. I don't think a loan is involved in this.
At the very least, I'd charge them something for the error. Banks aren't shy about charging customers for errors. A 1% return fee maybe, on top of whatever it costs me.
I tend to agree that Citigroup has the better argument, but this is weirdly lopsided coverage. Revlon's bank repaid Revlon's loan using money Revlon didn't have. Oops! But that's not clearly a reason for the lender to return the repaid loan.
What happens if I pay one of my bills and realize later that it would be more convenient for me to have paid less so I'd have more money for whatever else? How do I claw back the amount I now wish I hadn't paid?