Traders in Revlon have accused the struggling beauty business of “pillaging” mental residence it experienced pledged as collateral for a $1.8 billion loan as aspect of a “brazen” plan to elevate new money.

In a lawsuit submitted Wednesday, UMB Lender, the administrative agent for the loan companies, mentioned the collateral, which consists of emblems and other rights related with “many of the greatest regarded, nicely-recognized beauty brands in the globe,” has been “ripped away and pledged to other loan companies.”

Revlon secured the $1.8 billion loan in 2016 to help finance its acquisition of the iconic Elizabeth Arden manufacturer. Since that deal, its enterprise has been strike by the change to on-line procuring and, lately, the coronavirus pandemic, which still left it experiencing a economical storm previously this calendar year.

“This circumstance is a stark example of a borrower that has overlooked frequently its lawful obligations to its loan companies,” the fit states. “Covid-19 is no license to breach contractual commitments to loan companies, to have interaction in clear vote rigging, and to steal and reuse collateral for alternate applications.”

According to The Wall Street Journal, UMB signifies loan companies such as Brigade Capital Administration, HPS Financial investment Associates, and Symphony Asset Administration that “have spent months resisting Revlon’s restructuring methods.”

In a assertion, Revlon mentioned the team experienced “repeatedly resorted to baseless accusations in an try to enrich by themselves and damage the business by blocking Revlon from training its contractual rights to protected the financing necessary to execute our turnaround method and navigate the Covid-19 disaster.”

The fit alleges Revlon in the beginning siphoned off aspect of the collateral for the 2016 loan to protected a $200 million loan in 2019 from Ares Administration, giving the new loan company “its own, unique protection fascination in the quite exact residence.”

The business then allegedly negotiated a “bigger, bolder transaction” in Could 2020 that raised another $880 million and was “devastating” for the 2016 loan companies.

To complete the deal, the fit states, Revlon devised an end-operate all over the consent threshold by arranging a “sham” revolver loan with helpful buyers who provided the greater part necessary to approve the new financing.

Tommaso Boddi/Getty Photos for Beautycon

Ares Administration, beauty, coronavirus, Elizabeth Arden, Revlon, UMB Lender