Buyers in Revlon have accused the battling splendor enterprise of “pillaging” intellectual home it had pledged as collateral for a $1.8 billion financial loan as part of a “brazen” plan to increase new funds.
In a lawsuit filed Wednesday, UMB Lender, the administrative agent for the loan providers, claimed the collateral, which features logos and other rights linked with “many of the best regarded, very well-founded splendor manufacturers in the planet,” has been “ripped away and pledged to other loan providers.”
Revlon secured the $1.8 billion financial loan in 2016 to assistance finance its acquisition of the legendary Elizabeth Arden brand. Given that that deal, its business enterprise has been hit by the change to online purchasing and, lately, the coronavirus pandemic, which left it struggling with a monetary storm before this year.
“This scenario is a stark instance of a borrower that has overlooked consistently its lawful obligations to its loan providers,” the accommodate claims. “Covid-19 is no license to breach contractual commitments to loan providers, to interact in clear vote rigging, and to steal and reuse collateral for option reasons.”
In accordance to The Wall Road Journal, UMB signifies loan providers like Brigade Funds Management, HPS Expense Partners, and Symphony Asset Management that “have expended months resisting Revlon’s restructuring methods.”
In a statement, Revlon claimed the team had “repeatedly resorted to baseless accusations in an try to enrich them selves and hurt the enterprise by blocking Revlon from doing exercises its contractual rights to protected the financing vital to execute our turnaround strategy and navigate the Covid-19 crisis.”
The accommodate alleges Revlon at first siphoned off part of the collateral for the 2016 financial loan to protected a $two hundred million financial loan in 2019 from Ares Management, supplying the new loan provider “its personal, exceptional stability interest in the quite same home.”
The enterprise then allegedly negotiated a “bigger, bolder transaction” in May perhaps 2020 that raised yet another $880 million and was “devastating” for the 2016 loan providers.
To full the deal, the accommodate claims, Revlon devised an stop-operate around the consent threshold by arranging a “sham” revolver financial loan with friendly investors who supplied the majority wanted to approve the new financing.
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