Revlon gets court approval for $1.4 billion bankruptcy loan


Revlon products are on sale at a store in Manhattan, New York, U.S., June 29, 2022. REUTERS/Andrew Kelly/File Photo

Join now for FREE unlimited access to


Aug 1 (Reuters) – Revlon Inc (REV.N) received approval from a U.S. bankruptcy judge on Monday to proceed with a $1.4 billion loan, following an objection from junior creditors who made argue that its onerous terms could block their chance of recovering anything from the bankruptcy of a cosmetics company.

U.S. Bankruptcy Judge David Jones in Manhattan ordered loan modifications in response to concerns from junior creditors, but said Revlon must be allowed to borrow the money it needed to continue operations in the event of a bankruptcy.

Revlon filed for Chapter 11 in June, saying its $3.5 billion in debt left it too cash-poor to make timely payments to critical suppliers in its cosmetics supply chain. Read more

Join now for FREE unlimited access to


To shore up its supply chain and fund its bankruptcy lawsuit, Revlon sought additional funding from a coalition known as BrandCo Lenders, which had loaned Revlon $1.88 billion in the years before it filed for bankruptcy. .

Jones allowed Revlon to borrow $375 million early in the bankruptcy. Friday is releasing between $200 million and $1.05 billion in additional funds, some of which would be used to pay Revlon’s existing debts to BrandCo lenders.

The judge’s approval also commits Revlon to non-financial conditions, including a timetable for exiting bankruptcy by April 2023 on lender-friendly terms.

Jones ordered some changes to the loan agreement, giving Revlon more time to come up with a restructuring plan and giving junior creditors more power to sue on Revlon’s behalf.

Junior creditors can take legal action against the BrandCo lenders who originated the new loan. They alleged that these lenders previously “defrauded” Revlon’s stakeholders in a 2020 debt restructuring that used Revlon’s intellectual property as collateral. read more The 2020 transaction has already been the subject of lawsuits by other Revlon lenders. Read more

BrandCo’s lenders said the 2020 transaction kept Revlon afloat during the worst of the COVID-19 pandemic and was neither “fraudulent” nor “aggressive.”

Join now for FREE unlimited access to


Reporting by Dietrich Knauth, Editing by Alexia Garamfalvi and Bill Berkrot

Our standards: The Thomson Reuters Trust Principles.


Comments are closed.