Revlon: Court rejects attempts to form official equity committee

By Sarah Lizee

Olympia, Wash., Aug. 24 – Revlon, Inc.’s Chapter 11 bankruptcy case won’t have an official committee of non-insider equity holders appointed, according to court documents filed Wednesday with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, the investor group, which holds less than 1% of Revlon’s 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 group 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.”

However, the court ruled in favor of Revlon, which had objected to the motion, saying the appointment was 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.

Revlon 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.

The company 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 as Revlon, 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.

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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