Amid cancer-causing talc allegations and debt, the legendary Avon Products, Inc. (API) has filed for bankruptcy. According to Happi, API initiated voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware.
Avon's international business is not part of the filing. "It is business as usual in Avon’s international markets," the case states. "The Avon Company, which is the Avon brand in the U.S., is also not part of the proceedings."
“We remain focused on advancing our business strategy internationally, including modernizing our direct selling model and reigniting the brand to accelerate growth,” said Kristof Neirynck, CEO of Avon. “Since becoming CEO earlier this year, I am increasingly energized by our strengths and opportunities, supported by our valued associates and nearly two million representatives around the world.”
According to Bloomberg Law, the firm has already incurred in $225 million of costs defending personal injury lawsuits and settlement payments and doesn’t have “sufficient liquidity to litigate and/or settle” the cases, its Chief Restructuring Officer Philip Gund said in court filings. The company expects the number of lawsuits “will only continue to increase absent a permanent solution.”
The filling also shared that Natura &Co has "entered into an agreement to purchase Avon’s non-U.S. operations, subject to a Court-supervised auction process, as reported in the filing. API has secured a commitment from Natura &Co for debtor-in-possession financing to provide sufficient liquidity to fund API’s obligations during the sale process."
