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UMB, Citi at odds over administrative agent role for Revlon

Citigroup Inc. and UMB Bank NA are at odds over who is currently acting as administrative agent on a 2016 term loan to Revlon Consumer Products Corp. at the center of a recent lawsuit in New York federal courts, according to three sources familiar with the matter.

Revlon on Aug. 14 made public claims that it would fight the litigation with a group of term lenders over collateral siphoning in deals from 2019 and 2020, stating that UMB had no basis by which it could make legal claims against the company.

"This is a baseless lawsuit brought by UMB — who has no standing to even sue — and directed by a group of desperate lenders seeking to enrich themselves by harming Revlon," the company said on Friday. "We plan to seek dismissal of the suit and will continue to vigorously defend ourselves against these meritless accusations."

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Some believe those claims have teeth, as Citi has not fully passed the baton as administrative agent on the 2016 term loan, despite claims to the contrary by UMB Bank, according to two sources familiar with the matter. If true, then UMB would potentially not be an eligible plaintiff to sue on behalf of the lenders, they added.

UMB’s complaint in the Southern District of New York alleges that Citibank has repeatedly delayed negotiations to transfer the agency rights to UMB but that UMB became agent "no later than June 30, 2020" following lender consent.

In an official statement to LCD, UMB Bank says that it "is the administrative agent representing over 100 lenders in litigation against Revlon. We are entirely confident in our position as agent and in the complaint as filed."

Citi declined to comment.

In addition to the dispute with UMB, Citi is also contending with a separate snafu tied to the litigious Revlon term lenders, after it accidentally repaid their roughly $900 million in term loans on Aug. 12.

The cash was not advanced by Revlon itself and effectively belongs to Citi, sources said. A spokesperson for Revlon stated that the company "did not pay down the loan or any part of the loan." Sources familiar with the matter say it was a "clerical error" on Citi's behalf.

While some lenders in contact with LCD said they were returning the funds, The Wall Street Journal has reported that some are refusing to. Undoubtedly, that is because many of those same lenders are behind the lawsuit alleging that Revlon and its "accomplice" Citi siphoned away their previously pledged collateral.

UMB Bank is a subsidiary of UMB Financial Corp., a financial services company headquartered in Kansas City, Mo. UMB offers commercial banking, personal banking and institutional banking.

This article was written by Alexander Saeedy, a Senior Reporter for LCD.

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