Citibank sent a hedge fund $175 million by mistake. Now it's struggling to get the money back

London(CNN Business) Citibank has a big problem: It mistakenly wired roughly $175 million to Brigade Capital Management, and the hedge fund hasn't returned the money.

The US banking giant filed a lawsuit Monday in the Southern District of New York, seeking the return of funds that it said were transferred in an "operational mistake."

Citibank (C) said in court documents that it meant to send Brigade Capital around $1.5 million in interest payments on a loan the hedge fund made to troubled cosmetics company Revlon (REV). Instead, it wired roughly 100 times that amount of its own funds to the hedge fund. Other Revlon creditors also received erroneous payments adding up to $900 million.

Citibank, which acts as an administrative agent on the Revlon loan, alleges in court documents that Brigade Capital is refusing to return the money. "Brigade has taken the baseless position that Citibank's overpayment ... served to pay off Revlon's entire principal balance as well," the bank wrote in its complaint.

To support that allegation, the bank includes a message purportedly sent by Brigade Capital that says it's "not at all clear that the funds were sent as a result of 'clerical mistake.' "

The court placed a preliminary injunction against Brigade Capital on Tuesday, ordering it to either pay back the money or to not withdraw or dispose of it until a court appearance on August 31.

Brigade Capital declined to comment when contacted by CNN Business. Citibank said Brigade Capital's actions are "unconscionable" and asked the court to force the return of the money.

"Any other outcome would threaten the stability of the banking system [and] reward bad actors that try to capitalize on operational mistakes," the bank said in its complaint.

"We quickly caught our payment error and are taking the appropriate actions to recover those funds," a spokesperson added when contacted by CNN Business.

Unexpected windfalls can result in major headaches for ordinary Americans, as banks typically demand the money be returned. Depending on the state, consumers can face criminal charges if they spend money erroneously deposited in their account. A Pennsylvania couple faced felony theft charges last year after they spent $120,000 that their bank accidentally put in their account.

In 2016, Revlon acquired Elizabeth Arden, another American cosmetics brand, in a deal financed by a $1.8 billion loan of which Brigade Capital holds a slice. Under the credit agreement, Citibank collect payments from Revlon to give to the lenders.

Makeup brands have struggled during the pandemic because people are spending more time at home. Revlon shares are trading at $7.71 a share, down from recent high above $27 posted in October 2019.

In its complaint, Citibank said that Brigade Capital had no reason to expect a large payment from Revlon.

"Virtually no company, let alone a distressed retail and consumer company such as Revlon, would ever make such a substantial prepayment while dealing with the significant financial consequences caused by the ongoing pandemic," the complaint reads.