Revlon has received permission from a US bankruptcy judge to proceed with a 1.4 billion dollar loan.
The ruling comes despite junior creditors’ objections to the loan, each of which argued that its terms could deter any possibility of recovering anything from the company’s bankruptcy.
Manhattan-based judge David Jones ordered modifications to the loan in response, however said that the cosmetics firm must borrow the cash if it wishes to continue to operate in bankruptcy.
Revlon, which made the Chapter 11 filing in June, said at the time that it wanted to strategically reorganise its legacy capital structure, with the goal of improving its long-term outlook.
Additionally, the company’s 3.5 billion dollar debt load had made it late in paying critical vendors in its supply chain.
Some of its loan will be used to pay off existing debts to BrandCo lenders, which loaned Revlon 1.88 billion dollars in the years before it filed for bankruptcy.
Judge Jones’ approval further requires Revlon to follow a schedule for exiting bankruptcy by April 2023, while also giving the company more time to propose a restructuring plan and provide junior creditors with the ability to bring lawsuits on the company’s behalf.