SDNY Ruling Allows ARI’s Debt Account Sales Lawsuit Against Citibank to Proceed

February 1, 2024

The U.S. District Court for the Southern District of New York (SDNY) ruled that Harris St. Laurent & Wechsler LLP client Absolute Resolution Investments (ARI) can proceed with its ongoing lawsuit against Citibank over the manner in which Citibank sold delinquent debt portfolios to ARI.

HSW’s client alleges that Citibank illegally “cherry-picked” high-value accounts from the debt portfolios it sold ARI and that the debt accounts ARI purchased were materially lower in value than what Citibank had previewed to ARI pre-auction. ARI has sued Citibank for breach of contract and breach of the covenant of good faith and fair dealing seeking millions in damages. In a 53-page decision and order, SDNY Judge Victor Marrero denied Citibank’s motion to dismiss and upheld all of ARI’s claims, agreeing with the arguments raised in ARI’s opposition brief prepared by partners Yonaton Aronoff, Joe Gallagher, Evan Bolla and Alisha McCarthy.

“We look forward to putting Citibank’s questionable sales process under the spotlight of discovery,” said Aronoff.