Makeup giant Revlon Inc. has filed for Chapter 11 bankruptcy as the global supply chain crunch proved to be the tipping point for the debt-laden company that has struggled to tap into a broader cosmetics sales boom driven by social media influencers. The bankruptcy poses a challenging period for the cosmetic brand, which suffered losses during the pandemic after years of declining sales and endured financial controversies that the company said Thursday, June 16th, could ‘impede’ its restructuring process.
At issue is a disputed asset transfer in 2020, which saw Revlon avert the default by cutting a deal with lenders that moved collateral out of other creditors’ reach. The maneuver infuriated those who didn’t get a share and sparked years of litigation to follow. It also inadvertently entangled Citigroup Inc. after the bank helped arrange the deal and later paid some creditors nearly $900 million mistakenly while intending to process a periodic interest payment.
That was one of the industry’s most legendary blunders that led to ongoing litigation over ownership of the $500 million not returned by recipients. In court filings on Thursday, Revlon said that the resulting ‘uncertainty’ over who holds a bunch of term loans ‘is likely to impede’ the Chapter 11 process.
