The committee representing unsecured creditors also asked Jones to reject a shareholder committee.
“Revlon stock trading has all the outward appearances of a so-called ‘meme’ stock,” the committee said in its objection, referring to shares that rise in value only because of Internet chatter, not economic reason.
Revlon shares tumbled as much as 34% to as low as $5.62 Monday before rebounding to around $8.22, leaving them down some 3% on the day. That price is up from as little as $1.17 in June.
Nearly all official committee are appointed by the Office of the U.S. Trustee, an arm of the U.S. Justice Department that acts as a watchdog in corporate bankruptcies. In the Revlon case, the office appointed the unsecured creditor committee, but last month rebuffed the shareholders.
The shareholder group, which says it owns 4.7% of Revlon’s common stock not held by insiders, asked Jones on Aug. 9 to order the U.S.Trustee to appoint a panel. On that day, the shares closed at about $8.
Forcing Revlon to fund lawyers and other advisers for a minority group of shareholders would be a waste of money, the company said in court papers. Official committees have the fees of theirs advisers paid by the bankrupt company.
Shareholders argued that recent prices imply a chance they could get something back
Revlon filed bankruptcy in June as the global supply chain crunch squeezed the debt-laden company while it struggled to tap into a broader cosmetics sales boom driven by social-media influencers.
Investor Ron Perelman’s holding company MacAndrews & Forbes owns about around 85% of Revlon.
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