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Citigroup v Brigade Capital Management: Difference between revisions
Citigroup v Brigade Capital Management (view source)
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===Must the debt be “due”?=== | ===Must the debt be “due”?=== | ||
A way out occurred to Citi: at the time of the payment, Revlon’s debt to the lenders was not, ''then'', due and payable. It would not mature for another three years. This seems strikingly sensible, but the Judge could find nothing in the American Law Institute’s 1937 ''Restatement (First) of Restituion'', on which {{casenote|Banque Worms|Bank of America}} relied, or any of the [[common law]] precedents, that required a “present entitlement”. One might take the court to task for being a little too literal there. | A way out occurred to Citi: at the time of the payment, Revlon’s debt to the lenders was not, ''then'', due and payable. It would not mature for another three years. This seems strikingly sensible, but the Judge could find nothing in the American Law Institute’s 1937 ''Restatement (First) of Restituion'', on which {{casenote|Banque Worms|Bank of America}} relied, or any of the [[common law]] precedents, that required a “present entitlement”. One might take the court to task for being a little too literal there. | ||
Section 14 of the ''Restatement'' provides: | |||
{{quote|A creditor of another or one having a lien on another’s property who has received from a third person any benefit in discharge of the debt or lien, is under no duty to make restitution therefor, although the discharge was given by mistake of the transferor as to his interests or duties, if the transferee made no misrepresentation and did not have notice of the transferor’s mistake.}} | |||
==Citi and Revlon== | ==Citi and Revlon== | ||