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I fail to see all of the defense of Brigade that is happening here. Arguments that "Well Revlon owned them the money, they just through it was a prepayment" see

I fail to see all of the defense of Brigade that is happening here. Arguments that "Well Revlon owned them the money, they just through it was a prepayment" seems like a gross simplification of the situation. A prepayment of this magnitude would never happen without some sort of other communication. Further, as far as I know, Brigade was not owed $175M. There was a debt for that amount, but at the time the payment was made, they were only owed what was specified in the payment plan/agreement, which would have been the $1.5M. Just because they were also owed more money in the future, does not mean that it was owed now. As a "down to earth" example, my employer will owe me more money in the future, according to the terms of my employment. But on September 1st, they will only owe me my bi-monthly paycheck. If they over-pay me, and deposit a full years worth of my salary into my account, it is not reasonable for me to say "Oh, I guess they chose to prepay me for a year! Awesome." Your employer will take that over-payment back, and if you fight it, you will lose.

paulcole 6y ago
Except you haven't provided the work for the next year yet. Brigade did provide the "work" in the form of the money they had already lent out.
- TAForObvReasons 6y ago
  As far as the debtor, to whom Brigade "provided work", is concerned no payment was intended to have been made. It was a mistake committed by the bank. From a news article cited in the post: > “Revlon did not pay down the loan or any part of the loan,” a representative for [Revlon] said in an emailed statement. https://theprint.in/economy/citigroup-accidentally-wired-900-million-to-revlon-lenders-now-its-fighting-to-get-it-back/482438/ https://theprint.in/economy/citigroup-accidentally-wired-900...
  - 1024core 6y ago
    Maybe Revlon was planning on getting a lower interest rate loan. And that loan fell through at the last moment, and now they're claiming it was a mistake?
    - nrmitchi 6y ago
      1) If you're refinancing a loan, you do not pay off the old one until you have the new one. This is not only common sense, but typically before you get the new loan, you don't have funds to pay off the old one even if you wanted to. 2) Revlon did not make this payment. The payment was made in error by Citibank, and Revlon was not part of it. The conjecture of "Revlon made a bad decision and is now trying to back-track", while technically _possible_ sounds like a conspiracy theory.
jtc331 6y ago
Your employer analogy doesn't hold up because you have not yet tendered the services to your employer for which they would be indebted to you in the future. A better a analogy would be your mortgage, which is in fact a debt you owe in full, a payment schedule notwithstanding.
- devcpp 6y ago
  Brigade did not provide their service either. A lender provides the service of lending money over a certain amount of time. This money is like a contractor paid by the hour, working at the borrower's service. Brigade should not be entitled to having that money back until that time has either elapsed or the borrower decides to alter the payments. Another comparison would be me giving my wallet to a friend to buy something, then the wallet falls from his pocket into my landlord's hands, who declares this must be my next payment for rent. This does not sound fair.
  - arthurcolle 6y ago
    this second example seems like a better analogy for the situation
  - IncRnd 6y ago
    > Brigade did not provide their service either. A lender provides the service of lending money over a certain amount of time. This money is like a contractor paid by the hour, working at the borrower's service. Brigade should not be entitled to having that money back until that time has either elapsed or the borrower decides to alter the payments. That's not true. For comparison, many times a mortgage lender can call the loan at any time. The service of Brigade loaning the money had already happened. > Another comparison would be me giving my wallet to a friend to buy something, then the wallet falls from his pocket into my landlord's hands, who declares this must be my next payment for rent. This does not sound fair. A better comparison would be if your bank mailed a check every month to your mortgage lender, then suddenly sent a check for the exact remaining balance plus interest accrued.
- jmvoodoo 6y ago
  Except the loan was paid including all interest for the lifetime of the loan. If you prepaid your mortgage that way, even on purpose, your bank would owe you a good portion of your money back.
1024core 6y ago
Your "employer" argument is specious. A more apt example is mortgage. I just prepaid my mortgage recently (as a part of refi), but it is the exact same situation: instead of making interest payments, I chose to just pay everything that was owed at once. Maybe Revlon was thinking of getting a much cheaper (low interest) loan than what it had obtained from Brigade?
- jiofih 6y ago
  You must contact the bank first to do that, or use an automated system of theirs, but you can’t just drop the money in their account.
  - addison-lee 6y ago
    Yes they are being disingenuous with their comment (and commenting on every thread here with their comparison). They sent a check with their account number to an address specifically set up to receive mortgage payments. https://www.wellsfargo.com/mortgage/manage-account/payments https://www.wellsfargo.com/mortgage/manage-account/payments
    - bumby 6y ago
      I’m failing to see how that is a disingenuous argument?
terminalcommand 6y ago
I don't know about the case details, but Brigate might argue that Citibank paid Revlon's debt. There is nothing stopping you from clearing someone else's debt. It is as easy as doing a bank transfer. Unjust enrichment argument would be much stronger if Citibank did not have any involvement with the parties. For example if I send my money to an account numbered 100001 but I intended to send it to 1000011, I could argue that I don't know the account holder 100001 and I sent the money by mistake. Classical contract law is a byzantine beast, and it does not take mistakes lightly. Brigade might have thought that they secured an interest-free loan and want to use it. This would undermine Brigade's credibility and completely mess with their relationship with Citibank. But they might have thought what the hell, we get free financing. They also might be holding this as leverage against Citibank, if Citibank needs those funds urgently, they'll have to settle.
- 1024core 6y ago
  > There is nothing stopping you from clearing someone else's debt. But Citibank was not "someone else". Citibank was Revlon's banker. Imagine if you used BankOfAmerica to pay off your credit card bills monthly. Now imagine that you owe your CC a large amount, but are paying it off month-by-month (using BoA, as always). One month, BoA takes all of the owed money out of your account and sends it to you CC company, thereby paying off your CC debt. How is the CC to know whether you meant it or not?
  - binbag 6y ago
    But they didn’t take the money out of Revlon’s account. They just paid it from their own funds.
    - 1024core 6y ago
      That's irrelevant here. "Money" is just bits in some DB. The point is, BoA sent money to the CC company, like they always do. How is the CC company to know where the money originated from?
      - 6y ago
crb002 6y ago
"Revlon was expected to transfer a few million dollars to some of its lenders." - Brigade was owed money, and while Brigade must return funds in excess of the loan, it can't be forced to reloan the money - Citgroup would have to cure by pulling out their own checkbook to loan Revlon.
woofie11 6y ago
Let me walk you through how this plays out. Lawyers from Brigade and Citibank calculate Brigade's odds of winning. Let's say both sides agree it's 5%. That means the expect returns on litigating this are $8.75 million to Brigade. The cost of litigation is $2 million. The two sides discuss. They settle for anywhere between $6.75 and $10.75 million, depending on who negotiates better. That's where neither side wants to litigate. For being a little bit douchey, Brigade walks out a few million ahead. If sides can't agree (e.g. Citibank lawyers estimates 1% odds of winning and Brigade 10% odds), they go to court. But 9 times out of 10, it's a settlement like that.
- TAForObvReasons 6y ago
  What complicates things, and makes it more interesting, is the precarious state of Revlon. If they declare bankruptcy and restructure the obligations while the case is pending, Brigade would have been forced to take a loss on the loan. If they try to argue for the money as repayment for the debt, a bankruptcy court could claw back the money and redistribute according to the capital structure (akin to what happened during the Madoff resolution)
  - lifeisstillgood 6y ago
    So while this dispute is ongoing, Revlon has an extra 175M of someone else's money that could be brought into play during their bankruptcy- so they actually have an incentive to declare early?
    - bumby 6y ago
      What’s the upside for Revlon in this case? I don’t think the upside outweighs the downside unless the bankruptcy is inevitable
  - woofie11 6y ago
    It seems like that perhaps makes it more likely everyone will want to settle quickly. Settlement money shouldn't be subject to a clawback, so Revlon comes out ahead. And a clawback doesn't help Citi either -- they're out the full sum. At that point, Citi's money flows to help Revlon's creditors. What's even more interesting is that you're right that a clawback like that might actually happen. In theory, justice is blind. In practice, lots of courts exercise deep justice jurisprudence, and it's hard to argue Citi should get its money before Revlon's employees or similarly worthy parties. That actually plays to Brigade's benefit slightly, I think. If this risk is there, Citi will definitely want to settle quickly.
megiddo 6y ago
Finders keepers is actually a pretty strong argument in a case such as this. For instance, years ago, I had a business account of mine attached because an employee with signatory privileges had a garnishment against him. The judge ruled that since the lender that seized the money already had it, and I couldn't prove that the money wasn't absolutely, definitely not the property of the signatory (who was not an owner), we could split the money.
IncRnd 6y ago
That's not at all appliable to this situation. If Brigade had a Due For No Reason clause, they could have called the loan in at any time, just like a bank calling a mortgage due at any time. Even without such a clause, Brigade is owed the entire pricipal and all accrued interest, which is exactly what was paid. There was a payment plan, but that doesn't affect the actual amount owed. This literally was a prepayment. The question is whether this was accidental or not.
ponker 6y ago
I do know that if I write a bigger-than-monthly-payment check to my bank they reduce the principal by that amount -- mortgage lenders are required by law to offer this prepayment option. I don't know if I called them up and said that I did it by mistake whether they would refund me and mark the principal back up.

paulcole 6y ago

Except you haven't provided the work for the next year yet. Brigade did provide the "work" in the form of the money they had already lent out.

TAForObvReasons 6y ago
As far as the debtor, to whom Brigade "provided work", is concerned no payment was intended to have been made. It was a mistake committed by the bank. From a news article cited in the post: > “Revlon did not pay down the loan or any part of the loan,” a representative for [Revlon] said in an emailed statement. https://theprint.in/economy/citigroup-accidentally-wired-900-million-to-revlon-lenders-now-its-fighting-to-get-it-back/482438/ https://theprint.in/economy/citigroup-accidentally-wired-900...
- 1024core 6y ago
  Maybe Revlon was planning on getting a lower interest rate loan. And that loan fell through at the last moment, and now they're claiming it was a mistake?
  - nrmitchi 6y ago
    1) If you're refinancing a loan, you do not pay off the old one until you have the new one. This is not only common sense, but typically before you get the new loan, you don't have funds to pay off the old one even if you wanted to. 2) Revlon did not make this payment. The payment was made in error by Citibank, and Revlon was not part of it. The conjecture of "Revlon made a bad decision and is now trying to back-track", while technically _possible_ sounds like a conspiracy theory.

jtc331 6y ago

Your employer analogy doesn't hold up because you have not yet tendered the services to your employer for which they would be indebted to you in the future. A better a analogy would be your mortgage, which is in fact a debt you owe in full, a payment schedule notwithstanding.

devcpp 6y ago
Brigade did not provide their service either. A lender provides the service of lending money over a certain amount of time. This money is like a contractor paid by the hour, working at the borrower's service. Brigade should not be entitled to having that money back until that time has either elapsed or the borrower decides to alter the payments. Another comparison would be me giving my wallet to a friend to buy something, then the wallet falls from his pocket into my landlord's hands, who declares this must be my next payment for rent. This does not sound fair.
- arthurcolle 6y ago
  this second example seems like a better analogy for the situation
- IncRnd 6y ago
  > Brigade did not provide their service either. A lender provides the service of lending money over a certain amount of time. This money is like a contractor paid by the hour, working at the borrower's service. Brigade should not be entitled to having that money back until that time has either elapsed or the borrower decides to alter the payments. That's not true. For comparison, many times a mortgage lender can call the loan at any time. The service of Brigade loaning the money had already happened. > Another comparison would be me giving my wallet to a friend to buy something, then the wallet falls from his pocket into my landlord's hands, who declares this must be my next payment for rent. This does not sound fair. A better comparison would be if your bank mailed a check every month to your mortgage lender, then suddenly sent a check for the exact remaining balance plus interest accrued.
jmvoodoo 6y ago
Except the loan was paid including all interest for the lifetime of the loan. If you prepaid your mortgage that way, even on purpose, your bank would owe you a good portion of your money back.

1024core 6y ago

Your "employer" argument is specious. A more apt example is mortgage. I just prepaid my mortgage recently (as a part of refi), but it is the exact same situation: instead of making interest payments, I chose to just pay everything that was owed at once. Maybe Revlon was thinking of getting a much cheaper (low interest) loan than what it had obtained from Brigade?

jiofih 6y ago
You must contact the bank first to do that, or use an automated system of theirs, but you can’t just drop the money in their account.
- addison-lee 6y ago
  Yes they are being disingenuous with their comment (and commenting on every thread here with their comparison). They sent a check with their account number to an address specifically set up to receive mortgage payments. https://www.wellsfargo.com/mortgage/manage-account/payments https://www.wellsfargo.com/mortgage/manage-account/payments
  - bumby 6y ago
    I’m failing to see how that is a disingenuous argument?

terminalcommand 6y ago

I don't know about the case details, but Brigate might argue that Citibank paid Revlon's debt. There is nothing stopping you from clearing someone else's debt. It is as easy as doing a bank transfer. Unjust enrichment argument would be much stronger if Citibank did not have any involvement with the parties. For example if I send my money to an account numbered 100001 but I intended to send it to 1000011, I could argue that I don't know the account holder 100001 and I sent the money by mistake. Classical contract law is a byzantine beast, and it does not take mistakes lightly. Brigade might have thought that they secured an interest-free loan and want to use it. This would undermine Brigade's credibility and completely mess with their relationship with Citibank. But they might have thought what the hell, we get free financing. They also might be holding this as leverage against Citibank, if Citibank needs those funds urgently, they'll have to settle.

1024core 6y ago
> There is nothing stopping you from clearing someone else's debt. But Citibank was not "someone else". Citibank was Revlon's banker. Imagine if you used BankOfAmerica to pay off your credit card bills monthly. Now imagine that you owe your CC a large amount, but are paying it off month-by-month (using BoA, as always). One month, BoA takes all of the owed money out of your account and sends it to you CC company, thereby paying off your CC debt. How is the CC to know whether you meant it or not?
- binbag 6y ago
  But they didn’t take the money out of Revlon’s account. They just paid it from their own funds.
  - 1024core 6y ago
    That's irrelevant here. "Money" is just bits in some DB. The point is, BoA sent money to the CC company, like they always do. How is the CC company to know where the money originated from?
    - 6y ago

crb002 6y ago

"Revlon was expected to transfer a few million dollars to some of its lenders." - Brigade was owed money, and while Brigade must return funds in excess of the loan, it can't be forced to reloan the money - Citgroup would have to cure by pulling out their own checkbook to loan Revlon.

woofie11 6y ago

Let me walk you through how this plays out. Lawyers from Brigade and Citibank calculate Brigade's odds of winning. Let's say both sides agree it's 5%. That means the expect returns on litigating this are $8.75 million to Brigade. The cost of litigation is $2 million. The two sides discuss. They settle for anywhere between $6.75 and $10.75 million, depending on who negotiates better. That's where neither side wants to litigate. For being a little bit douchey, Brigade walks out a few million ahead. If sides can't agree (e.g. Citibank lawyers estimates 1% odds of winning and Brigade 10% odds), they go to court. But 9 times out of 10, it's a settlement like that.

TAForObvReasons 6y ago
What complicates things, and makes it more interesting, is the precarious state of Revlon. If they declare bankruptcy and restructure the obligations while the case is pending, Brigade would have been forced to take a loss on the loan. If they try to argue for the money as repayment for the debt, a bankruptcy court could claw back the money and redistribute according to the capital structure (akin to what happened during the Madoff resolution)
- lifeisstillgood 6y ago
  So while this dispute is ongoing, Revlon has an extra 175M of someone else's money that could be brought into play during their bankruptcy- so they actually have an incentive to declare early?
  - bumby 6y ago
    What’s the upside for Revlon in this case? I don’t think the upside outweighs the downside unless the bankruptcy is inevitable
- woofie11 6y ago
  It seems like that perhaps makes it more likely everyone will want to settle quickly. Settlement money shouldn't be subject to a clawback, so Revlon comes out ahead. And a clawback doesn't help Citi either -- they're out the full sum. At that point, Citi's money flows to help Revlon's creditors. What's even more interesting is that you're right that a clawback like that might actually happen. In theory, justice is blind. In practice, lots of courts exercise deep justice jurisprudence, and it's hard to argue Citi should get its money before Revlon's employees or similarly worthy parties. That actually plays to Brigade's benefit slightly, I think. If this risk is there, Citi will definitely want to settle quickly.

megiddo 6y ago

Finders keepers is actually a pretty strong argument in a case such as this. For instance, years ago, I had a business account of mine attached because an employee with signatory privileges had a garnishment against him. The judge ruled that since the lender that seized the money already had it, and I couldn't prove that the money wasn't absolutely, definitely not the property of the signatory (who was not an owner), we could split the money.

IncRnd 6y ago

That's not at all appliable to this situation. If Brigade had a Due For No Reason clause, they could have called the loan in at any time, just like a bank calling a mortgage due at any time. Even without such a clause, Brigade is owed the entire pricipal and all accrued interest, which is exactly what was paid. There was a payment plan, but that doesn't affect the actual amount owed. This literally was a prepayment. The question is whether this was accidental or not.

ponker 6y ago

I do know that if I write a bigger-than-monthly-payment check to my bank they reduce the principal by that amount -- mortgage lenders are required by law to offer this prepayment option. I don't know if I called them up and said that I did it by mistake whether they would refund me and mark the principal back up.