Revlon Creditors Say the Company’s Bankruptcy Is Headed for a “Mess”

Revlon Inc. is facing pushback to its proposed $1.4 billion bankruptcy loan, with its official creditors’ committee opposing the loan and calling the cosmetic company’s case a “mess” in a Wednesday court filing, Reuters reported. The bankruptcy financing would hand too much power to a coalition of lenders, which hold about half of the company’s $3.5 billion debt, at a time of great uncertainty about the company’s future and who should control it, the creditors’ committee said in a filing in the U.S. Bankruptcy Court for the Southern District of New York. "No one today knows what Revlon is worth," and the lender coalition's proposed financing is an effort to "seize the company before its value has been determined," the committee wrote. Revlon filed for chapter 11 in June, saying its high debt load left it too cash-poor to make timely payments to critical vendors in its cosmetics supply chain. It began its bankruptcy case by borrowing $375 million from the lender coalition, and it will seek approval of the rest of the loan at a bankruptcy hearing next week before U.S. Bankruptcy Judge David Jones. The lender coalition, known as the BrandCo Lenders, includes private-equity and hedge funds such as Ares Management and Oak Hill Advisors. The creditors’ committee argued in Wednesday's filing that the same lender coalition had already “fleeced” other Revlon creditors in a 2020 transaction that allowed Revlon to take on more debt while transferring its brands and intellectual property assets to a different Revlon subsidiary.