Citigroup v Brigade Capital Management: Difference between revisions

Citigroup v Brigade Capital Management (view source)

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 A judgment that surely struck terror into earnest hearts in the [[Trust and agency professional|global trust and agency community]], the US District Court’s [https://int.nyt.com/data/documenttools/ruling-on-citi-s-900-million-transfer-to-revlon-lenders/5f57c39ebdb6e58c/full.pdf stonking 105-page judgment] in the {{casenote|Citigroup|Brigade Capital Management}} addresses a perfect storm of unexpected factors to come to quite the eye-catching — well, eye-''watering'', at any rate — conclusion.
-Headline: Citigroup, who as Revlon’s [[loan servicing agent]], accidentally paid half a billion dollars of principal to lenders when it only meant to pay $8m of interest, ''couldn’t have its money back''.
+Headline: Citigroup, who as the lenders’ [[loan servicing agent|adminstrative agent]], accidentally paid half a billion dollars of principal to lenders when it only meant to pay $8m of interest, was told that due to an obscure defence to an unusual common law action, it ''couldn’t have its money back''.
 Happily — and in the [[JC]]’s entirely inconsequential opinion, rightly — the New York Appeals Circuit overturned Mr. Justice Furman’s first-instance decision on 8 September 2022. The next section is the JC’s (again, entirely inconsequential but, dammit, ''correct'') assessment of the first instance decision:
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 This case has ''everything'': it is as if all the ghastly phantoms of commercial legal practice converged in some mountain eyrie for a satanic feast on the bones of a poor, harmless, well-meaning global banking conglomerate. The [[JC]] liked it so much he has formulated a new equitable principle: ''[[durum caseum per magnos canibus]]'': “hard cheese for big dogs”: a sort of dark inversion of the [[JC]]’s ''[[anus matronae parvae malas leges faciunt]]''<ref>“[[little old ladies make bad law]]”</ref> principle.
 ==Facts==
-Revlon — you know, ''that'' Revlon: lippy, perfume, nail polish; a struggling “heritage” brand — borrowed a ton of money in 2016 to acquire Elizabeth Arden.<ref>What made Elizabeth Arden? When Max Factor. Oldie but a goodie.</ref> The financing was complex but the thing to know was that Citi acted as Revlon’s ''[[loan servicing agent]]''. {{loan service agent capsule}}
+Revlon — you know, ''that'' Revlon: lippy, perfume, nail polish; a struggling “heritage” brand — borrowed a ton of money in 2016 to acquire Elizabeth Arden.<ref>What made Elizabeth Arden? When Max Factor. Oldie but a goodie.</ref> The financing was complex but the thing to know was that Citi acted as the lenders’ ''[[loan servicing agent|administrative]]''. {{loan service agent capsule}}
-The key concept here is “[[agent]]”, my little legal eaglets. Citi had no responsibility for Revlon’s obligations: Revlon would pre-fund all the payments it needed to make to the lenders. If — as seemed increasingly likely — Revlon could not meet its obligations, this was the lenders’ problem, not Citi’s.
+Citi had no responsibility for Revlon’s obligations: Revlon would pre-fund all the payments it needed to make to the lenders. If — as seemed increasingly likely — Revlon could not meet its obligations, this was the lenders’ problem, not Citi’s.
 You can just imagine the [[indemnities]], [[disclaimers]], [[waiver|waivers]] and exclusions of liability littered through Citi’s standard agency legal documents, can’t you. If they were bad before, just imagine what they look like ''now''.