A February 16, 2021 decision of the United States District Court for the Southern District of New York held, in In re Citibank August 11, 2020 Wire Transfers, 520 F. Supp. 3d 390, that lenders who received almost $900 million mistakenly wired to them by Citibank (the administrative agent for a $1.8-billion syndicated seven-year term loan to Revlon [2016 Loan]) were entitled to keep the money.

The Bottom Line

As the saga of the Paragon Offshore plc bankruptcy (Bankr. D. Del., No. 16-10386 (CSS)) continues, it is useful to reflect upon Judge Sontchi’s denial of confirmation of its bankruptcy plan last November. In a 70-page ruling examining the feasibility of the plan in detail, Judge Sontchi concluded that the plan proposed by the debtors was not feasible because their business plan was not reasonable, and Paragon would not be able to refinance its debt in 2021 at maturity. Balance sheet solvency upon exit was not prioritized in the court’s analysis.