March 29, 2024

GHBellaVista

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Revlon Accused of Fraud Over $1.8B Loan

Traders in Revlon have accused the struggling elegance enterprise of “pillaging” mental house it had pledged as collateral for a $1.eight billion mortgage as section of a “brazen” plan to raise new funds.

In a lawsuit submitted Wednesday, UMB Bank, the administrative agent for the loan companies, explained the collateral, which involves logos and other rights affiliated with “many of the ideal regarded, properly-proven elegance models in the earth,” has been “ripped absent and pledged to other loan companies.”

Revlon secured the $1.eight billion mortgage in 2016 to assistance finance its acquisition of the iconic Elizabeth Arden brand. Considering the fact that that offer, its company has been hit by the shift to on the internet browsing and, lately, the coronavirus pandemic, which still left it struggling with a economic storm earlier this year.

“This case is a stark illustration of a borrower that has overlooked repeatedly its lawful obligations to its loan companies,” the fit suggests. “Covid-19 is no license to breach contractual commitments to loan companies, to interact in transparent vote rigging, and to steal and reuse collateral for alternative purposes.”

In accordance to The Wall Road Journal, UMB represents loan companies including Brigade Funds Administration, HPS Investment Partners, and Symphony Asset Administration that “have used months resisting Revlon’s restructuring methods.”

In a statement, Revlon explained the group had “repeatedly resorted to baseless accusations in an attempt to enrich them selves and hurt the enterprise by blocking Revlon from exercising its contractual rights to safe the funding essential to execute our turnaround technique and navigate the Covid-19 crisis.”

The fit alleges Revlon in the beginning siphoned off section of the collateral for the 2016 mortgage to safe a $200 million mortgage in 2019 from Ares Administration, offering the new financial institution “its possess, special safety interest in the really exact same house.”

The enterprise then allegedly negotiated a “bigger, bolder transaction” in May 2020 that elevated an additional $880 million and was “devastating” for the 2016 loan companies.

To total the offer, the fit suggests, Revlon devised an conclusion-run close to the consent threshold by arranging a “sham” revolver mortgage with helpful investors who provided the the greater part needed to approve the new funding.

Tommaso Boddi/Getty Illustrations or photos for Beautycon

Ares Administration, elegance, coronavirus, Elizabeth Arden, Revlon, UMB Bank