Add Bardin Hill Loan Management, Investcorp Credit Management, Greywolf Loan Management, Zais Group, Allstate Investment Management, Medalist Partners Corporate Finance, Tall Tree Investment Management, New Generation Advisors, and Highland Capital Management Fund Advisors to the list of asset managers Citibank is suing over its $900 million loan debacle.
Following lawsuits against Brigade Capital Management, HPS Investment Partners, and Symphony Asset Management, Citi has now sued the nine asset managers alleging that they owe the bank $108.7 million, a fraction of the larger loan.
“Citi had no other options here,” according to a source familiar with the matter. “I’m not sure why [the asset managers] would repay the money.”
At issue is what Citi calls a “mistaken” repayment of a loan for cosmetics maker Revlon. Citi is the administrative and collateral agent for that loan, which means it facilitates the payments between Revlon and its lenders, which are the asset managers the bank is now suing.
Citi said it only intended to pay the interest due on the loan, but due to “issues with its loan processing system,” it repaid the $900 million in full, which Revlon had not transferred to the bank.
“These overpayments were made with Citibank’s own money,” according to the bank's new complaint.
During a conference with the court on Wednesday, Citi’s attorney Matthew Ingber told the judge that more lawsuits may come, depending on whether the lenders agreed to return the money.
Ingber also told the judge that many other lenders had already returned the money to Citi. HPS and Brigade’s lawyer, Benjamin Finestone, said that Citi mistakenly repaid a total of 40 managers.
As in its other lawsuits, Citi has asked the court to place temporary restraining orders on the asset managers to prevent them from using the money until the court decides whether they need to return it to Citi.
In the HPS, Brigade, and Symphony cases, the judge already granted that restraining order.
Quinn Emmanuel, the firm representing HPS and Brigade, is now also representing seven of the nine parties Citi sued on Thursday.