A three-year legal battle between cosmetics giant Revlon and its creditors has come to an end after a judge approved a plan to resolve the dispute over an errant $900 million payment by Citigroup.
The dispute began in 2017 when Revlon, a publicly traded company, was refinancing its debt. Citigroup, which was acting as the lead arranger for the refinancing, mistakenly wired $900 million to some of Revlon’s creditors.
The creditors, which included Brigade Capital Management, HPS Investment Partners, and Symphony Asset Management, refused to return the money, claiming that they were entitled to keep it. Revlon then sued the creditors, claiming that the payment was made in error and that the money should be returned.
On Tuesday, Judge Jesse Furman of the U.S. District Court for the Southern District of New York approved a settlement between Revlon and the creditors. Under the terms of the settlement, the creditors will return $717 million of the $900 million to Revlon. The remaining $183 million will be split among the creditors.
In a statement, Revlon said it was “pleased” with the outcome of the case. “We are pleased that the Court has approved the settlement and that we can now move forward with our business,” said Revlon CEO Debra Perelman. “We are grateful to our creditors for their cooperation in resolving this matter.”
The settlement ends a long and costly legal battle for Revlon. The company had sought to recover the full $900 million, but the creditors argued that they were entitled to keep the money because it was paid in error. The settlement avoids a potentially lengthy and expensive trial.
The settlement also resolves a separate dispute between Revlon and Citigroup. The bank had sought to recover the $900 million from the creditors, but the creditors argued that Citigroup was responsible for the error and should not be allowed to recover the money. Under the terms of the settlement, Citigroup will receive $717 million from the creditors.
The settlement is a victory for Revlon, which has been struggling financially in recent years. The
Sources: https://www.ft.com/content/2b54fb24-d6ba-4114-94ec-db40e485a037
