Revlon Obtains Court Approval for Chapter 11 Plan

Paul, Weiss obtained court approval for longtime client Revlon Inc.’s plan of reorganization under chapter 11. The plan will trim $2.7 billion of debt and allow the company to exit bankruptcy in April 2023. U.S. Bankruptcy Judge David Jones in the Southern District of New York, who has been overseeing the company’s chapter 11 case, said Revlon had reached “a hard-fought multi-faceted settlement” that resolves a “series of enterprise-threatening” risks to the business.

Judge Jones approved the plan after overruling objections from the Office of the United States Trustee concerning third-party releases included in the plan. He said the releases being granted by nondebtors to third parties under the plan were consensual and that an “opt-out” mechanic was appropriate under the circumstances.

The plan swaps more than $2.7 billion in secured debt for equity, and provides $44 million for unsecured creditors and a $650 million new rights offering. The reorganization will provide a sustainable foundation for future growth, Revlon said on March 31 in a court filing.

Revlon filed for bankruptcy on June 16, 2022, with $3.6 billion in debt in the face of continuing supply chain issues. On February 14, in a significant victory for Revlon in an adversary proceeding that was central to the case, Judge Jones dismissed claims by prepetition lenders that the company improperly “stripped” collateral on a loan to secure a new loan during the early days of the COVID pandemic. The court found that the prepetition lenders had no standing to bring those claims, rejecting in full their demand that the transactions in question be unwound and that the lenders’ collateral and associated liens be restored. In dismissing all claims, Judge Jones reaffirmed the rights of a debtor in a bankruptcy, adopting virtually all of the Paul, Weiss team’s arguments.

Formed in 1932, Revlon features a diversified portfolio of brands sold in approximately 150 countries worldwide, including Revlon, Revlon Professional, Elizabeth Arden, Almay, Mitchum, CND, American Crew, Creme of Nature, Cutex, Juicy Couture, Elizabeth Taylor, Britney Spears, Curve, John Varvatos, Christina Aguilera and AllSaints, among others.

The Paul, Weiss team included, among others, restructuring partners Paul Basta, Alice Eaton, Robert Britton, Kyle Kimpler, Brian Bolin and Sean Mitchell, and counsel Sarah Harnett and Diane Meyers; litigation partners Lew Clayton, William Clareman and Aidan Synnott, and counsel Paul Paterson and Jonathan Hurwitz; corporate partners John Kennedy, Thomas de la Bastide, David Carmona and Kyle Seifried, and counsel Keerthika Subramanian and David Epstein; tax partner Robert Holo and counsel Anne McGinnis and Sarah Katz; executive compensation partners Jean McLoughlin and Rebecca Coccaro, and counsel Ron Aizen; intellectual property partner Claudine Meredith-Goujon; real estate partner Peter Fisch and counsel Barry Langman; environmental counsel William O’Brien; and antitrust counsel Marta Kelly.