The loan operation staff of Citigroup, New York has bank wired $900 million, apparently on behalf of Revlon, the cosmetic giant controlled by Ron Perelman. The Citigroup confessed it to be a clerical error, and that has now led the bank into a conflict between the Perelman empire and a corps of sharp-edged investment funds.

One financier involved likened the surprise payment to find a fortune on the sidewalk. Later, various hedge funds realized that Revlon was in default on the loan were showing no signs to give Citigroup's money back. This is one of the biggest screw-ups on Wall Street and led to people question what led to this blunder.
Michael Stanton, Former Restructuring & Bankruptcy Adviser says, "It’s a billion-dollar clerical error. This is probably knocking around some very big rooms at Citibank".

The rift triggered when Revlon and a group of lenders who sued the cosmetics company and demanded immediate repayment of a term loan that the cosmetic company was due in 2023. Alongside the lenders claimed that Revlon has sifted some intellectual property rights backing their loan into collateral for new debt. The other lenders that include Symphony Asset Management, Brigade Capital Management, and HPS Investment Partners are seeking court order to return the collateral, which includes brand trademarks. The administrative agent Citi was also named as a defendant in the lawsuit.

At the same time the lawsuit was filed, the nearly $900 million, an amount close to the full principal value of the loan and accrued interest landed in the lender's bank accounts. But, the payment was a particularly welcome surprise when considering that the loan trades for less than 30 cents on the dollar, sighting that the investor has minimal assurance on getting a full recovery under the usual scenario.

Revlon in a statement states, “This group of lenders has repeatedly resorted to baseless accusations in an attempt to enrich themselves and hurt the company by blocking Revlon from exercising its contractual rights to secure the financing necessary to execute our turnaround strategy and navigate the Covid-19 crisis”.