In an ironic twist to Citigroup Inc.’s banking saga, a former senior executive is filing legal action against the company demanding they resume pay on his multi-million dollar severance package.

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In another chapter in Citigroup Inc.’s banking saga, a former senior executive is filing a lawsuit against the company demanding they resume pay on his multi-million dollar severance package.

Citigroup’s policies include a hefty severance pay, but the company has frozen payments on severance packages for six months because of the recent banking crisis and subsequent government bailouts, said The Financial Times.

Kevin Kessinger, formerly in charge of operations and technology for the banking giant, is filing the suit through arbitration, an out-of-court dispute resolution system. Kessinger now works for Canada’s Toronto Dominion Bank as the chief information officer.

The bank told top executives in June 2009 that it would not be offering million-dollar severance packages, The Financial Times reported, in an effort to diffuse what was turning into a massive political blow out over bankers’ salaries. Among several other banking behemoths, Citigroup’s reputation has been clouded by its involvement in the securitized mortgage market and its need for three federal bailouts, putting the government’s total investment at $45 billion.

Recent bailout repayment plans have also struggled, The New York Times reported. The company’s attempt to solicit private investors to replace $20 billion of bailout money went poorly, forcing United States Treasury officials to hold off on plans to reduce their involvement with the bank.