Absolute Resolutions Investments. v. Citibank

The United States Distict Court in New York recently denied Citibank’s Motion to Dismiss Absolute Resolution Investments, LLCs lawsuit against it for breach of contract and other claims involving Citibank’s sale of delinquent credit card debt to Absolute.  The case will now proceed to the discovery process.

To provide some background, Absolute  Resolution Investment is a debt buyer. Debt buyers acquire defaulted debts that original creditors have been unable to recover. Debt buyers are held accountable to the same regulations as debt collection agencies. Moreover, they must demonstrate legal authority to pursue the debt and verify the outstanding balance before initiating collection efforts. Specific guidelines govern the conduct of debt buyers during debt recovery attempts.

In the amended complaint, Absolute alleges Citibank sold credit card accounts to debt purchasers like Absolute through bidding. These accounts were either sold in bulk or through multi-month flow sales. Absolute claims that Citibank misrepresented the quality of the accounts it sold, leading to discrepancies between the expected and actual value of the portfolios Absolute purchased.

Absolute details its agreements with Citibank, explicitly referencing the Master Purchase and Sale Agreements, which outlined Citibank’s representations and warranties regarding the accounts sold. The agreements also provided remedies for breaches, including a notice procedure for Absolute to notify Citibank of breaches within 180 days.

Absolute alleges that Citibank breached its representations and warranties by delivering portfolios with a lower value than represented during the bidding process. This allegedly occurred in several sales flows, including the October 2019, March 2020, and September 2020 sales flows. Absolute asserts that Citibank suspended portfolio sales in April 2020 due to the COVID-19 pandemic, but other approved debt purchasers did not experience similar interruptions.

In May 2020, Citibank approached Absolute to negotiate a release of claims, which Absolute signed under the impression that it would not be able to bid on Citibank’s debt in the future if it did not sign. Absolute claims Citibank marketed different types of portfolios, such as “Early-Out” and “Fresh” accounts, and that discrepancies persisted in the September 2020 sales flow.

Ultimately, Absolute suspended payment for future sales in December 2020, leading Citibank to terminate their agreement the following month. Absolute then filed this lawsuit alleging fraud, breach of contract, and breach of the covenant of good faith and fair dealing against Citibank.

Absolute Resolutions Invs. v. Citibank, 22 Civ. 2079 (VM) (S.D.N.Y. Jan. 29, 2024)

What to do if you are being sued by Absolute Resolutions Investments?

If you’re facing legal action from the Absolute Resolutions Investments, having a capable attorney on your side can greatly influence the outcome. At Diwan Law, LLC, our clients have witnessed the advantages of our services. We aim to either dismiss lawsuits or negotiate significantly reduced debt amounts through our dedicated legal team’s efforts. Our priority is to help clients settle their debts on fair and reasonable terms. If you’re dealing with a lawsuit in Georgia, reach out to us today to safeguard your interests. Contact Diwan Law, LLC at (404) 635-6883 for a case evaluation.