Revlon emerges from Chapter 11 without longtime owner Ron Perelman; his daughter’s at the helm

Revlon emerged from bankruptcy protection last week with a more attractive balance sheet but minus its owner of nearly 40 years, Ron Perelman.

Perelman’s 85% ownership stake was wiped out in Revlon’s court-supervised reorganization. However, his daughter, Debra, remains chief executive.

“We are emerging today as a stronger company,” Debra Perelman said in a statement. “With a simpli ed capital structure, signi cantly reduced debt and a new, highly experienced and committed board of directors, we look forward to unlocking the full potential of our globally recognized brands.” million in losses over the previous two years and while amassing about $4 billion in liabilities.

Revlon emerged from Chapter 11 with $2.7 billion in debt eliminated from its balance sheet, leaving it with $1.5 billion in debt outstanding. It has $236 million in liquidity.

Executive Chairman

Liz Smith said: “While honoring the company’s legacy, I look forward to working alongside the management team and my director colleagues to usher in a new era.”

Financial numbers are only part of the story with Revlon, whose paid endorsers have included Cindy Crawford and Gal Gadot.

Revlon’s new shareholders are hedge funds that had loaned money that wasn’t repaid. e company led for bankruptcy protection last June after piling up more than $800 e Manhattan-based company was acquired by Perelman in 1985 via a $2.7 billion hostile takeover funded with junk bonds. e deal marked Perelman’s entry into New York society. He collected art, invested in restaurants including Graydon Carter’s Monkey Bar and Marcus Samuelsson’s Red Rooster, and brie y served as chairman of Carnegie Hall. Perel- man, 80, over the years bought and sold dozens of companies, went through numerous marriages and feuded in court with his business partners, but through it all, he kept control of Revlon.

“I love the business. I love the industry,” Perelman told e Wall Street Journal in 2006. “For good or bad, I’m most de ned by Revlon.”

Landmark ruling e Revlon takeover remains signi cant because it unleashed a legal battle that led to a landmark Delaware court ruling. e ruling said that when a company is about to be sold, the board’s foremost duty is to get the best price possible rather than ght the transaction. e 1986 decision paved the way for a wave of corporate takeovers that have consolidated virtually every economic sector, from food and transportation to banking and technology. ■