Revlon gets court approval for $1.4 billion bankruptcy loan

By Dietrich Knauth

– Revlon Inc acquired a U.S. chapter choose’s permission on Monday to proceed with a $1.4 billion mortgage, over an objection by junior collectors who argued that its onerous phrases may block their probability to get well something from the beauty firm’s chapter.

U.S. Chapter Decide David Jones in Manhattan ordered modifications to the mortgage in response to the junior collectors’ issues, however mentioned Revlon have to be allowed to borrow the money it must proceed its operations in chapter.

Revlon filed for Chapter 11 in June, saying its $3.5 billion debt load left it too cash-poor to make well timed funds to crucial distributors in its cosmetics provide chain.

To shore up its provide chain and fund its chapter court docket case, Revlon sought extra financing from a coalition often known as the BrandCo Lenders, which had loaned Revlon $1.88 billion within the years earlier than it filed for chapter.

Jones allowed Revlon to borrow $375 million at the beginning of the chapter. Friday’s unlocks between $200 million and $1.05 billion in extra funds, a few of which might be used to pay Revlon’s current money owed to BrandCo lenders.

The choose’s approval additionally commits Revlon to non-financial situations, together with a schedule for exiting chapter by April 2023 on phrases favorable to the lenders.

Jones ordered some adjustments to the mortgage settlement, giving Revlon extra time to suggest a restructuring plan and giving junior collectors extra authority to carry lawsuits on Revlon’s behalf.

The junior collectors might carry a lawsuit in opposition to the BrandCo lenders behind the brand new mortgage. They've alleged that these lenders beforehand “fleeced” Revlon stakeholders in a 2020 debt restructuring that used Revlon’s mental property as collateral. The 2020 transaction has already been topic to lawsuits by different Revlon lenders.

The BrandCo lenders have mentioned the 2020 transaction stored Revlon afloat throughout the worst of the COVID-19 pandemic, and was neither “fraudulent” nor “aggressive.”