Citigroup, Inc. Sued for Trademark Infringement by City Financial; Damages Projected in Excess of $125 Million.

SANTA ANA, Calif.--(BUSINESS WIRE)--Oct. 27, 1999--

City Financial Alleges Citigroup, Inc. Used Its Name Without

Permission To Nationally Promote Its Commercial Credit Business;

Injunction Sought

City Financial announced today that late yesterday afternoon it filed suit in US District Court, Central District of California, Southern Division against Citigroup, Inc. for trademark infringement, unfair competition, and false advertising.

The complaint alleges that Citigroup, Inc. (NYSE:C) knowingly adopted a name similar to Plaintiff's City Financial(TM) and began using it to nationally promote its commercial credit business after Plaintiff had rejected a written request asking for permission to do so. CitiCorp, Inc., CitiFinancial Credit Company and CitiFinancial Credit Company, Inc. are named as co-defendants. Plaintiffs seek to immediately enjoin Defendants from using the "CitiFinancial" name, and damages are projected in excess of $125 million. City Financial vs. Citigroup, Inc. (Case No. 99-1323) will be assigned a judge in the near future.

City Financial registered the City Financial(TM) with the California Secretary of State on January 6, 1992, and has owned Registration No. 039814 since that time. The company is a lending institution, advertising and promoting its services to consumers under the City Financial(TM) mark, and is listed in the K Guide and Lane Guide.

As required by California law, Defendants sent a letter to Plaintiff on February 4, 1999, requesting Plaintiff's consent to reserve and use the name "CitiFinancial, Inc." in California for consumer lending and financing services. Plaintiff promptly wrote back and refused.

In September, 1999, City Financial discovered that Defendants had begun using the name "CitiFinancial" after they started receiving telephone calls from "customers" confusing their company with Defendants'. They immediately telephoned CitiFinancial's Deputy General Counsel, asking them to cease use because the names were confusingly similar: City Financial versus CitiFinancial. They received no affirmative response indicating that they would change the name. On September 21, Plaintiff wrote to Defendants, again reiterating their objections and demanding that they cease and desist using the City Financial(TM) name.

On September 30, Defendants replied to Plaintiff, indicating they would review and respond to their letter. City Financial followed with a five-day cease and desist letter on October 1. Defendants responded on October 8 by asking for a meeting with Plaintiff and, on October 18, City Financial met with counsel for Defendants in Orange County, CA. At that meeting, Defendants refused to acknowledge the confusion and further refused to discontinue use of the infringing "CitiFinancial" mark.

Since September, City Financial has been inundated with misdirected telephone calls and letters from consumers, who mistakenly believed that they were contacting Defendants and not Plaintiff. With the likelihood of confusion and deception growing among the key publics it serves, City Financial filed this suit to protect its valuable goodwill and business reputation as symbolized by the City Financial(TM) mark.

"The City Financial trademark belongs exclusively to us," said Larry Rose, company President, "and we have worked long and hard to build a respectable name among consumers and the financial services community. Under no circumstances would we allow anyone else to use our name, and that is why we rejected Citigroup's request when it was made earlier this year."

"We were appalled to discover several months later," explained Rose," that Citigroup had ignored our refusal and was deliberately using a name essentially identical to our 'City Financial' name to promote the rebranding of their consumer financial services across the country. Healthy competition is one thing, but we do not appreciate being railroaded by anyone, regardless of size. It has always been our policy to vigorously defend our corporate identity against interlopers, and this case is no exception."

"Once a mark is registered," stated William E. Levin, Plaintiff's counsel, "the owner is entitled to have others respect it and not use it without permission. For Defendants to have asked for City Financial's consent and then bypass their refusal is a blatant disregard of the law. City Financial's willingness to take on a corporate behemoth speaks loudly to the issue of 'might verus right' and, we look forward to fighting for justice on their behalf."

City Financial is a California corporation founded in 1948 and is based in Orange, Calif. The company makes first and second trust deed loans secured by real estate only. Since, 1978 when Larry Rose bought the company, City Financial has written over $150,000,000 in loans. Plaintiff is represented by William E. Levin with the Laguna Beach, Calif. law firm, which recently won a $143 million verdict for Trovan, Ltd. in their trademark infringement case against Pfizer, Inc.