A federal judge on Thursday said Citigroup Inc's lawsuit to recoup some of the nearly $900 million it mistakenly paid Revlon Inc's lenders appeared on track for trial next week after receiving assurances he had authority to conduct it.

U.S. District Judge Jesse Furman in Manhattan had late Wednesday said he could not be sure all the defendants were citizens of different states than the bank's South Dakota-based Citibank unit, a jurisdictional requirement for the planned Dec. 9 nonjury trial.

But at a hearing, lawyers for Citigroup and the defendants said they were making substantial progress on that issue, and confident at least most defendants could stay in the case.

"I'm relieved in that it seems like it won't blow up the trial on this issue," Furman said.

The lawsuit stemmed from Citigroup's having on Aug. 11 sent $893 million of its own money, rather than a $7.8 million interest payment, to Revlon's lenders.

Citigroup was acting as the loan agent for the struggling cosmetics company, which lacked sufficient cash to fully repay the loan, which was due in 2023.

The bank blamed human error for the blunder, and said the defendants knew the payment was a mistake but have nonetheless refused to return $508 million. It said about 200 lenders have returned the remaining $385 million.

But the defendants, including Brigade Capital Management and HPS Investment Partners, said they were not obligated to return money Revlon owed, and had no reason to believe a global bank such as Citigroup would transfer the full amount by accident.

Some defendants also said they thought Revlon's controlling shareholder, billionaire Ronald Perelman, would never let Revlon fail, and might have stepped in to bail the company out as he had done before.

A trial is expected to last four days.

The case is In re: Citibank August 11, 2020 Wire Transfers, U.S. District Court, Southern District of New York, No. 20-06539.