LeBron creditors to contest 2020 loan deal

(Reuters) – Some of Revlon’s creditors have asked a U.S. bankruptcy judge in Manhattan to roll back the bankrupt cosmetics giant’s 2020 loan restructuring.

Creditors, including Brigade Capital and Nuveen Asset Management, said in court filings late Monday that LeBron’s bankruptcy proceedings had a huge stake based on “fake” loan deals that took place in 2019 and 2020. accused another faction of lenders, known as the Brandco Lenders, of wielding such influence. .

If their challenge succeeds, Brandco’s lenders will no longer have the right to claim Revlon’s brand as exclusive collateral, which could reduce the influence of Brandco’s lenders in bankruptcy.

Both lender groups participated in the $2 billion loan LeBron used to buy Elizabeth Arden in 2016. According to the filing, it used assets as collateral in violation of a 2016 loan agreement.

Lawyers for LeBron and Brandco’s lenders did not immediately respond to requests for comment. Ares declined to comment.

When LeBron filed for bankruptcy in June, Brandco lenders held about $1.88 billion of LeBron’s $3.5 billion debt. They lent the company another $975 million to fund the Chapter 11 lawsuit.

Through the 2019 and 2020 transactions, Revlon will acquire trademarks and other intellectual property rights related to beauty brands such as Elizabeth Arden, Almay, and Lu for additional debt that is higher priority than the company’s existing debt. It was transferred to a newly established subsidiary that took over.

Those deals allowed LeBron to borrow an additional $880 million from Brandco’s lenders in 2020, according to the complaint.

The disputing lender had previously sued Brandco’s lender, but Revlon’s bank, Citibank, mistakenly paid $900 million while trying to process $7.8 million in interest payments on a 2016 loan. So their case got sidetracked.

Revlon said it is considering selling the company as a possible exit from Chapter 11.

Reporting by Dietrich Knout; Editing by Alexia Garamfalvi and Ed Osmond

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