Citigroup will re-pay New York City pensions at least $15 million related to the collapse of National Century Financial Enterprises, the company and city said on Friday. The New York City pension funds lost $80 million on cash collateral reinvested in National Century, which declared bankruptcy in November 2002, a joint statement said.
“At issue was a question of whether Citibank (Citigroup unit), as custodian, should have sold National Century securities once the securities were downgraded,” the statement said. The agreement includes the immediate payment of $15 million and potential future payments depending on the city’s ability to collect damages from other parties, the statement said.
“The funds are aggressively pursuing recovery from National Century’s officers and directors as well as Bank One Corp., Credit Suisse Group, J.P. Morgan, Fitch Rating agency and others in federal court in Ohio for their roles in National Century’s collapse,” the statement said.