By Claire Boston
The bankruptcy caps a tumultuous period for the cosmetics giant, owned by billionaire
At issue is a
That marked one of the industry’s most
The company said in court filings Thursday that the resulting “uncertainty” over who holds a slew of term loans “is likely to impede” the Chapter 11 process.
“We don’t know whether folks are going to want to challenge that transaction,”
At least one group of creditors said the 2020 debt deal will need to be addressed in the bankruptcy.
“My clients believe that transaction was improper,”
Revlon sought court protection in the Southern District of New York late Wednesday. It listed assets totaling $2.3 billion as of late April, and debts of $3.7 billion, according to court papers.
Chapter 11 filings allow a company to continue operating while it works out a plan to repay creditors. Revlon said in a statement that it’s lined up $575 million of so-called debtor-in-possession financing from existing lenders to fund itself during bankruptcy.
“Consumer demand for our products remains strong – people love our brands, and we continue to have a healthy market position. But our challenging capital structure has limited our ability to navigate macro-economic issues in order to meet this demand,” Revlon Chief Executive Officer
The 90-year-old company got its start selling nail polishes in the throes of the Great Depression, and later added coordinated lipsticks to its collection. By 1955, the brand was international.
Perelman’s holding company took control of Revlon in an acrimonious takeover in 1985, funding the deal with junk debt raised by
The company’s debt load proved burdensome, especially after it sold more than $2 billion of loans and bonds to fund its acquisition of Elizabeth Arden in 2016. It also owns brands including Cutex and Almay, and markets in more than 150 countries.
In recent years, Revlon has struggled to compete with newer brands and those owned by rivals
The case is Revlon Inc.,
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–With assistance from
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Sid Verma, Catherine Bosley
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By Claire Boston