Photographer: Daniel Acker / Bloomberg
Photographer: Daniel Acker / Bloomberg
Citigroup Inc. has recovered less than half of a $ 900 million payment it was accidentally on Lenders of Revlon Inc., some of whom are locked in a bitter battle with the struggling cosmetics giant.
The bank had recovered some money, causing the New York financier to plead guilty to a clerical error, and more were due Friday, according to people with knowledge of the case. But some of the lenders – including three companies that claimed Revlon was in default and should have repaid them anyway – refused to return it, said the people, who asked not to be identified because the case is private.
A Citigroup representative declined to comment on the payment, which was previously reported by the Wall Street Journal. Revlon said it was not behind the payment.
“Revlon has not yet paid off part of the loan,” a company representative said in an email.
The payment error comes as Revlon, managed by Ron Perelman’s MacAndrews & Forbes, is embroiled in a legal dispute with a group of lenders including Brigade Capital Management, HPS Investment Partners and Symphony Asset Management over the company’s debt restructuring tactics. On Wednesday, UMB Bank, sued Revlon on behalf of the lenders, arguing that it was moving valuable market advantages out of reach of lenders to take advantage of other lenders.
Brigade, HPS and Symphony are one of the deviant companies that have not repaid the payment for incidental loans, which was the equivalent of the principal amount plus interest paid, the people said.
Read more: Revlon sues secured loan for takeovers
Along with the suit, UMB Revlon sent a report of acceleration on the loans, claiming that the company operates below a standard, the people said. Revlon said it would contest UMB’s “earnings” process and said UMB has no standing because it is not the agent on the loan.
“This group of lenders has repeatedly resorted to baseless allegations in an attempt to enrich itself and hurt the company by blocking Revlon from exercising its contractual rights to secure the funding needed to carry out our turnaround strategy. to celebrate and navigate the Covid-19 crisis, “Revlon said in an earlier statement.
Revlon struggles to stay relevant and stem falling sales amid competition from Estee Lauder Cos. En a host of smaller businesses that use social media to attract customers. With nearly $ 3 billion in debt, the retailer has been hit hard by the pandemic and is seeking to refinance its loans.
Due to the legal battle, Citigroup was already in the process of resigning from its administrative role before the payment mishap, the people said.
A full repayment is something of a coup for distressed credit specialists with positions in Revlon’s loan. The loan trades hands for less than 30 cents on the dollar, signaling that investors have low hopes of repaying it fully under normal circumstances. The cosmetics company has been waiting options for restructuring its $ 3 billion debt burden, many of whom would need lenders to take on significantly less than par value on the debt.
(Updates fifth member with names of companies that have not returned the money)
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