Cosmetics firm seeks Chapter 11 bankruptcy protection amid high debt and stagnant sales
Revlon Ultra HD lip colour. Picture: BLOOMBERG/DANIEL ACKER
At issue is a disputed asset transfer largely in 2020, which saw Revlon stave off default by cutting a deal with lenders that moved collateral out of other creditors’ reach. The financing manoeuvre angered those who missed out and sparked years of litigation. It also inadvertently embroiled Citigroup after the bank helped arrange the deal, and later mistakenly paid some creditors nearly $900m while intending to process a routine interest payment.
“We don’t know whether folks are going to want to challenge that transaction,” Paul Basta, a bankruptcy attorney for Revlon, said during the company’s first Chapter 11 hearing. “If this is going to become a dispute, it should be raised immediately and addressed so it doesn’t become a drain on the estate.”“My clients believe that transaction was improper,” James Savin of law firm Akin Gump Strauss Hauer & Feld said on behalf of a group of term lenders.
The 90-year-old company got its start selling nail polishes in the throes of the Great Depression, and later added co-ordinated lipsticks to its collection. By 1955, the brand was international.