If you were a customer of Brigade capital you’d be buying them champagne right now. They they just saved $170 million of your money that you would have had to accept as a loss should Revlon go bankrupt (which it probably will).
Edit: That is if it is a legitimate error-error not citibank try to pull a takesy-backsy.
What kind of duty? Not a legal one, I think.
It's like a natural process to these companies. Most likely CITI is getting it back. But it's probably a worthy gamble on the lawyering fees.
Frankly, the entire chunk of money should be considered legally tainted until legal action is resolved; which means escrow it somewhere and unleash the lawyers.
All of a sudden, we may see some consideration given to proper verification ( not just quick rubber stamp ).
Even if Revlon goes under because the courts pull what I'd call a derp, it should create the illustrative case that creates a business niche for higher reliability/risk financial transactions.
I used to think that this kind of repuational thing meant something. I pick Don as one of many examples just because he's literally gone on from that situation to become the president. Banks need to make big loans. If they make you a big loan, they owe you - go go broke it matters to them. You and me, nah. They'll burn us in a heartbeat when we're financially responsible without much reputation damage to the banks either. Reputation, it's not worth anything. And that is a sad, sad realisation and do not relish sharing it.
Conversely, Warren Buffet famously has a "halo" which means he gets favorable terms because people know that doing business with him will reflect well on them.
Different pockets of finance have different norms about who it's OK to screw and how, and even as an investment professional I don't understand the conventions in areas outside of my specialty. So it's very hard to judge as an outsider what is considered unethical and reputation-destroying, and what is considered aggressive business practices that happen to come at the expense of other sophisticated professionals.
You and me would have a lot of trouble getting that kind of financing without a hideous reputation. Don has one and got it. Now he's even the president. Bad reputations count for not all that much at all. And I hate that, fwiw.
Buffet's reputation, now that's a whole nother discussion. Yes it deserves to be better than Don's. Coke, McDonalds and buying off-market at huge discounts to support management against shareholders. Obesity, diabetes and legal resdistribution of people's retirment savings to berkshire hathaway. Yes, a reputation too good to be true nonetheless. I agree.
So have George Soros and Carl Icahn.
Edit: And this is not $500 BILLION so you can say, F it, boom or bust, let's try it. The upside isn't that much, relatively speaking, considering the blacklisting downside. Even if Revlon doesn't pay, a large % is already banked or will be in bankruptcy proceedings so it's not a 100% loss.