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For a while, it looked as though hedge fund Brigade Capital Management and its likeminded Revlon creditors didn’t need to worry about the cosmetic company’s descent into bankruptcy: After all, in one of the more spectacular Wall Street whoopsies of recent years, Citigroup had mistakenly paid them all they were owed by Revlon from its own pocket, and the courts said they could keep it. Let Citi deal with the nightmare of being one of Ron Perelman’s disfavored debt-holders—if he’d let them—bleating on about the unfairness of Revlon’s efforts to shield its most valuable assets from those lenders to which it had pledged said assets as collateral, in order to seal its second salvation in four years.

If all that sounds too good to be true, it’s because it was: A federal appeals court in September order Brigade & co. to return the money they obviously knew was sent in error. And so they now find themselves back in court fighting a fight they thought for two years they wouldn’t have to.

Some of Revlon's creditors have asked a U.S. bankruptcy judge in Manhattan to unwind the bankrupt cosmetic giant's 2020 loan restructuring, saying that a group of senior lenders fleeced other creditors by improperly laying claim to the company's valuable intellectual property assets…. Both lender groups participated in a $2 billion loan that Revlon used to purchase Elizabeth Arden in 2016. But the Brandco lenders, which include private equity and hedge funds such as Ares Management and Oak Hill Advisors, then loaned Revlon additional money and claimed more of Revlon's assets as collateral, in violation of the 2016 loan agreement, according to the filing.

Revlon creditors challenge 2020 loan transactions [Reuters]

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