Revlon, unsecured creditors balk at attempt to form equity committee

By Sarah Lizee

Olympia, Wash., Aug. 22 – Revlon, Inc. and its official committee of unsecured creditors objected to an attempt by a group of the company’s public investors to appoint an official committee of non-insider equity holders, according to court documents filed with the U.S. Bankruptcy Court for the Southern District of New York.

The group, which Revlon said holds less than 1% of outstanding common shares, had asked the U.S. trustee overseeing the case to appoint an official equity committee about a month ago, but the U.S. trustee declined.

The equity holders made the request again this month, arguing that without the “imprimatur of official committee status,” equity holders cannot meaningfully participate in the Chapter 11 cases “without disadvantage” and will suffer from “de facto exclusion.”

Revlon said appointment of an official equity committee is neither necessary nor useful or appropriate.

“These Chapter 11 cases include numerous well-funded parties with sophisticated counsel who either will directly represent the interests of equity holders or whose interests are aligned with shareholders’ interests (and, thus, whose advocacy will benefit shareholders),” Revlon said in court documents.

The company also said that the informal equity group has not carried its burden to show that there is a substantial likelihood of a meaningful recovery for equity holders in the Chapter 11 cases.

Revlon said that instead of appointing an official equity committee, the court should deny the motion but allow the group to continue participating in the cases as an informal committee.

The official committee of unsecured creditors shared the same objections and added that, absent relevant and reliable proof that equity may be “in-the-money,” an official equity committee should not be appointed unless there is a reason to believe that the creditors committee can’t serve as an effective case counterbalance for the debtors.

A hearing is scheduled for Aug. 24.

The hair color products and cosmetics company is based in New York. The company filed bankruptcy on June 15 under Chapter 11 case number 22-10760.

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