• Citi urges judge to extend freeze on its $500 million mistake
• Lawyer drops bombshell in hearing but doesn’t identify bank

By Jennifer Surane, Chris Dolmetch & Katherine Doherty @ Bloomberg.com Updated on April 9, 2021, 1:35 PM EDT

A lawyer for Citigroup Inc. told a federal judge on Friday he was aware of another big bank that had recently made an even larger payment error than its own $900 million transfer to Revlon Inc. lenders.

The lawyer, Neal Katyal, dropped the bombshell at a hearing in which Citibank urged the judge to extend a freeze on more than half a billion dollars it wired asset managers for Revlon creditors last summer -- an epic back office blunder that led to a closely watched trial. Some of them returned the money, and Citibank unsuccessfully sued 10 others for the $504 million they refused to give back. The judge froze the funds during the dispute.

Katyal never identified the other bank after alluding to it on Friday. The hearing centered on whether the freeze would continue. The judge didn’t rule.

“The toothpaste can’t be put back in the tube,” Katyal told U.S. District Judge Jesse Furman in Manhattan by video conference. “There’s no guarantee this can be fixed later” if Furman releases the money and Citibank wins an appeal it filed shortly after the judge ruled for the defendants in February.

‘Lottery-like Windfall’ [....]