Shortly after Citibank suffered a heavy blow in Court in a lawsuit over a $900 million payment error and asked for a freeze on the funds it allegedly sent by mistake, the firms that got the money have opposed Citi’s motion.

Documents filed by the defendants in this case with the New York Southern District Court on March 12, 2021, indicate that they want to use the money Citibank has sent to them (allegedly by mistake) as they see fit.

The payment at the heart of this case concerned Revlon’s 2016 Loan. Let’s recall that, in 2016, Revlon acquired Elizabeth Arden, Inc. The deal was partially facilitated by a seven-year, $1.8-billion loan. Brigade currently holds a portion of the loan. The Credit Agreement governs the term loans held by Brigade. Citibank serves as the administrative agent and collateral agent for the loan.

On August 11, 2020, several months of accrued interest came due under a credit agreement. The interest payment was to be processed by Citibank in its capacity as administrative agent. No other amount was due at the time, and Revlon transferred no additional funds to Citibank.

The interest payment was processed by Citibank on August 11, 2020. Due to issues with the loan-processing system, the payment to each lender was on average more than 100 times the interest that was actually due. Brigade was one of the lenders that received an overpayment.

This operational mistake caused Citibank to transfer approximately $900 million of its own money to parties that were not entitled to it. When Citibank discovered the mistake, it promptly asked the recipients to return its money. Some recipients did return the money, but some did not.

Citibank sued the lenders that did not return the money. However, the District Court sided with the lenders. Citi is challenging the District Court’s decision. In the meantime, Citi wants that the lenders be restricted from using the funds they allegedly got by mistake.

But the lenders disagree in their opposition submitted on March 12, 2021.

The Revlon lenders argue that the result at trial was not the one Citibank wanted, but the lenders are the rightful owners of the funds, and they should be able to put their money to use without delay. That is in keeping with federal practice generally, which disfavors injunctions pending appeal.

According to the lenders, there is no sound basis for any continuing restriction on their money.

Citibank tells the Court its ruling threatens to disrupt “the global financial system,” and that the public interest therefore “strongly favors” injunctive relief. That is the same argument, with the same parade of horribles, that the defendants in Banque Worms pressed before the Court of Appeals more than thirty years ago. But Revlon lenders note that the sky has not fallen—syndicated lending has grown exponentially since Banque Worms was decided, and mistakes like the one here are exceedingly rare.

In a sense, though, Citibank is right when it says the Court’s ruling will have an “enormous impact.” Banks have already reacted to the verdict by reforming their wire transfer practices, and their credit agreements, to avoid similar mistakes and disputes in the future.

In the end, Citibank seeks a stay, not because it can satisfy the criteria for obtaining one, but because it is aggrieved that the Lenders received a “lottery-like windfall,” the defendants say.

But the Lenders say they received exactly what they were owed. They note that, as rightful owners, they are entitled to use their money as they see fit.