Banks Seeking New Protections in Wake of Citigroup’s $900M Mistake By Katherine Doherty and Lisa Lee | March 3, 2021
Wall Street banks are seeking new legal protections to help avoid a repeat of Citigroup Inc.’s accidental $900 million payment to Revlon Inc. lenders.
After last month’s surprise court ruling that let certain Revlon creditors keep $500 million of the mistaken transfer, banks began inserting new language into loan deals that would require investors to return the money if such an error occurred again. The provisions, which were in the works before the decision, aim to strengthen the hand of administrative agents that oversee interest distributions and repayment schedules.
Banks have begun inserting new language into loan deals that would require investors to return accidental payments like the one Citigroup made to Revlon's lenders last year.