Citi has said that it would appeal the decision. "We believe we are entitled to the funds and will continue to pursue a complete recovery of them," a spokeswoman for the bank said.
Citi, which was acting as an administrator for Revlon's 2016 loans, was supposed to send $7.8m in interest payments on behalf of the firm. Last August however, it wired nearly $900m to the firm's lenders - paying off its debts.
Citi recognized its the mistake, and managed to recover some of the money. However 10 firms, including Brigade Capital Management and Allstate Investment, refused to return the funds, prompting Citi to sue.
Judge Furman said he was bound by New York law, which has previously found that funds received to repay a debt do not need to be returned, if "they discharge a valid debt, the recipient made no misrepresentations to induce the payment, and the recipient did not have notice of the mistake".
"The non-returning lenders believed, and were justified in believing, that the payments were intentional," Judge Furman wrote.
"To believe otherwise - to believe that Citibank, one of the most sophisticated financial institutions in the world, had made a mistake that had never happened before, to the tune of nearly $1bn - would have been borderline irrational."
A recorded Webinar from the Payments Journal; "How digital acceleration will affect the payments industry?" The Webinar includes guest speakers from Mercator, Capgemini and HPS
When people discuss 'banking being broken', they often refer to the technology itself. As Ewan Silver says - that isn't necessarily the case.
The fundamental flaw within banking at the moment is the way that banking products are treated within the organization. A customer can get a retail bank account, a credit card, and a mortgage from one bank.
They would expect this to be a seamless process, as it looks like one entity - but from the bank's perspective, these are three different businesses entirely.
The banks have no single-view of a customer. This was OK for a while. All banks worked in this way, so there wasn't exactly a high bar set for them,
But now, with challenger banks offering realtime payments and notifications, and GDPR regulations enforcing banks to enforce KYC across entire organisations, the banks NEED a single customer view.
And they can't seem to get there easily. So what are the potential solutions? Ewan explains it all.
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