With a debt of almost $ 3 billion, the company has been hit hard by the pandemic and is seeking to restructure its loans.
Citigroup is trying to recover almost $ 900 million that it mistakenly paid to creditors of personal care company Revlon. Lenders and Revlon have been embroiled in a fierce standoff since 2016 over the transfer of assets.
Revlon lenders refuse to return the money to Citi, which they found paid into their bank accounts on Wednesday, at a rate equal to that at which they had lent Revlon plus interest, according to individuals who have knowledge on the subject. The bank demanded a refund, citing a bureaucratic mistake, but so far no such move has been made.
The error has also occurred while Revlon is embroiled in a legal dispute with a group of lenders over its debt restructuring. On Wednesday, UMB Bank sued the company on behalf of several lenders, including Brigade Capital Management and HPS Investment Partners, claiming it transferred valuable assets to the benefit of certain creditors.
Along with the lawsuit, UMB sent Revlon a notice requesting that the repayment of the loans be expedited, arguing that the company was operating under liquidation. For its part, Revlon stated that it would oppose the “claim” of UMB.
“These lenders have repeatedly used baseless allegations in an attempt to enrich and harm the company, preventing Revlon from exercising its contractual rights to secure the funding needed to carry out our crisis management strategy of overcoming the Covid-19 crisis”, Revlon has claimed in a statement.
Revlon, which is controlled by Ron Perelman’s MacAndrews & Forbes, is working to keep up with sales and stay competitive with Estee Lauder, as well as smaller companies that use social media to attract customers. With a debt of almost $ 3 billion, it has been hit hard by the pandemic and is seeking to restructure its loans.