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Bankruptcy or Receivership.
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As previously disclosed, on June 15, 2022 (the “Petition Date”) and
June 16, 2022, Revlon, Inc. (“Revlon”) and certain subsidiaries, including Revlon Consumer Products Corporation (“Products Corporation” and together with Revlon, the “Company”) (the chapter 11 filing entities collectively, the
“Debtors”), filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy
Court”). The cases (the “Chapter 11 Cases”) are being administered under the caption In re Revlon, Inc., et al. (Case No. 22-10760 (DSJ)). The Debtors continue to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the
Bankruptcy Code and orders of the Bankruptcy Court.
On March 31, 2023, the Debtors filed the Third
Amended Joint Plan of Reorganization of Revlon, Inc. and Its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code [Docket No. 1727] (as may be amended, supplemented, or otherwise modified from time to time, and including all
exhibits and supplements thereto, the “Plan”). A copy of the Third Amended Plan is attached as Exhibit 99.1 to this Current Report on Form 8-K.
On April 3, 2023, the Bankruptcy Court entered an order (the “Confirmation
Order”) confirming the Plan. A copy of the Confirmation Order, with a copy of the Plan as confirmed attached thereto, is attached as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference. Capitalized terms
used but not otherwise defined in this Current Report on Form 8-K have the meanings given to them in the Plan. The Plan incorporates by reference certain documents filed with the Bankruptcy Court as part of the Plan Supplement as the same has been
amended from time to time prior to confirmation of the Plan and may be further amended prior to the effective date of the Plan (the “Effective Date”) or as otherwise set forth in the Plan or Confirmation Order.
The Company is currently targeting an Effective Date occurring on or before April 28, 2023.
On the Effective Date, Revlon intends to terminate its registration of
Revlon’s Class A Common Stock under the Securities Exchange Act of 1934 (the “Exchange Act”) and cease filing any further periodic or current reports with the Securities and Exchange Commission (the “SEC”). Although the Company is
targeting occurrence of the Effective Date as soon as reasonably practicable, the Company can make no assurances as to when, or ultimately if, the Plan will become effective. It is also possible that technical amendments could be made to the Plan
prior to the Effective Date.
The following is a summary of the material terms of the Plan. This summary describes only certain substantive provisions of the Plan and
is not intended to be a complete description of the Plan. This summary is qualified in its entirety by reference to the full text of the Plan and the Confirmation Order.
Pursuant to the Plan, there will be a restructuring that provides for, among other things, the treatment for classes of claims and
interests as follows:
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FILO ABL Claims. Each holder of a claim under the ABL Facility Credit Agreement to be repaid in full in cash;
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OpCo Term Loan Claims. Each holder of OpCo Term Loan Claims (2016 Term Loan Claims and 2020 Term B-3 Loan Claims against the “Opco” Debtors) to receive (a) its pro rata share of cash in the amount of $56 million or (b) if such
holder makes or is deemed to make the Class 4 Equity Election, such holder’s pro rata share of 18% of (i) the New Common Stock issued on the Effective Date, prior to and subject to dilution by any New Common Stock issued in connection with
the Equity Rights Offering, including, for the avoidance of doubt, any New Common Stock issued pursuant to the Backstop Commitment Agreement, in connection with any MIP Awards, and/or upon the exercise of the New Warrants, and (ii)
the Equity Subscription Rights; provided that holders of no more than $334 million of OpCo Term Loan Claims are permitted to elect to receive cash;
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2020 Term B-1 Loan Claims. Each holder of 2020 Term B-1 Loan Claims to receive, either (a) a principal amount of first lien take-back loans equal to such holder’s Allowed 2020 Term B-1 Loan Claim with $20 million of the adequate
protection payments payable on March 8, 2023 deferred to the earlier of the termination of the Restructuring Support Agreement and the Effective Date, and then waived under the Plan upon the Effective Date or (b) an amount of cash equal to
the principal amount of first lien take-back term loans that otherwise would have been distributable to such holder under clause (a);
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2020 Term B-2 Loan Claims. Each holder of 2020 Term B-2 Loan Claims to receive its pro rata share of 82% of (a) the New Common Stock issued on the Effective Date, prior to and subject to dilution by any New Common Stock
issued in connection with the Equity Rights Offering, including, for the avoidance of doubt, any New Common Stock issued pursuant to the Backstop Commitment Agreement, in connection with any MIP Awards, and/or upon the exercise of the New
Warrants, and (b) the Equity Subscription Rights;
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BrandCo Third Lien Guaranty Claims. Holders of third lien guaranty claims against the “BrandCo” Debtors to receive no recovery or distribution on account of such claims against the “BrandCo” Debtors;
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Unsecured Notes Claims. Each holder of unsecured notes claims against the Debtors to receive such holder’s pro rata share of New Warrants, which will have a 5-year term and be exercisable to purchase an aggregate number of shares
of the New Common Stock equal to 11.75% of the New Common Stock (after giving effect to the full exercise of the New Warrants and the issuance of New Common Stock in connection with the Equity Rights Offering (including, for the avoidance
of doubt, any New Common Stock issued pursuant to the Backstop Commitment Agreement)), subject to dilution by any New Common Stock issued in connection with Reorganized Holdings’ management incentive plan), which will be issued by
Reorganized Holdings on the Effective Date with a strike price set at an enterprise value of $4 billion;
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General Unsecured Claims. Each holder of a general unsecured claim (“General Unsecured Claims”) in a class that votes to accept the Plan to receive its pro rata share of the amount of $44 million and retained preference
action net proceeds allocated to such class;
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Qualified Pensions. Qualified pension plans to be reinstated; and
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Interests in Revlon. Interests in Revlon, including holders of Revlon’s Class A Common Stock prior to emergence, to receive no recovery or distribution on account of such interests, and upon emergence from Chapter 11, all such
pre-emergence interests in Revlon, including Revlon’s Class A Common Stock, will be canceled, released, extinguished, and discharged, and will be of no further force or effect.
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Pursuant to section 1123(b)(3) of the Bankruptcy Code and Rule 9019 of the
Federal Rules of Bankruptcy Procedure, the Plan contains and effects global and integrated compromises and settlements (collectively, the “Plan Settlement”) of all actual and potential disputes between and among the Debtors
(including, for clarity, between and among the “BrandCo” entities, on the one hand, and the “OpCo” or “Non-BrandCo” entities, on the other hand), the Creditors’ Committee, the Consenting BrandCo Lenders, and the Consenting 2016 Lenders and all
other disputes that might impact creditor recoveries, including, without limitation, any and all issues relating to:
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the allocation of the economic burden of repayment of the ABL DIP Facility and Term DIP Facility and/or payment of adequate protection obligations provided pursuant
to the Final DIP Order among the Debtors;
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any and all disputes that might be raised impacting the allocation of value among the Debtors and their respective assets, including any and all disputes related to
the Intercompany DIP Facility; and
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any and all other Settled Claims, including all claims arising in respect of the Debtors’ historical financing transactions, including the 2019 Financing Transaction
and the BrandCo Financing Transaction.
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The Plan also incorporates a settlement (the “Hair Straightening
Settlement”) between the Debtors and Hair Straightening Claimants, which is affirmatively supported by, among others, the Consenting BrandCo Lenders and certain of the Debtors’ insurers.
Upon confirmation of the Plan, the Plan Settlement and the Hair Straightening Settlement will be binding upon all creditors and all other
parties in interest pursuant to section 1141(a) of the Bankruptcy Code.
As of March 1, 2023, the Company had 54,302,001 issued and outstanding shares of Revlon’s Class A Common Stock. Pursuant to the Plan, the
Company will, as of the Effective Date: (a) cancel all outstanding shares of Revlon’s Class A Common Stock, (b) issue approximately 50,000,000 shares of the New Common Stock, including shares of the New Common Stock on account of the Equity
Subscription Rights; (c) reserve for issuance up to approximately 6,657,224 shares of New Common Stock on account of the New Warrants, which share reserve shall be subject to change in accordance with the terms of the Warrant Agreement; and (d)
reserve for issuance up to approximately 4,593,829 shares of New Common Stock on account of an equity incentive plan, the terms and conditions of which will be determined following the Effective Date.
As of the Effective Date, the Company expects to have an aggregate of approximately 50,000,000 shares of New Common Stock issued and
outstanding. The New Common Stock is not expected to be listed on any national securities exchange.
Information regarding the assets and liabilities of the Company as of the most recent practicable date is hereby incorporated by
reference to the Company’s Annual Report on Form 10-K for the period ended December 31, 2022, filed with the SEC on March 17, 2023.