After numerous lawsuits, the company ran out of money.
Avon Products, Inc., the U.S.-based non-operating holding company for the Avon cosmetics brand, announced it has filed for voluntary bankruptcy protection in the District of Delaware to resolve its debt and liabilities under the talc.
This is stated in the press release of the company.
The reason for this decision were the lawsuits of more than 380 people who claimed that talc in the company's products causes cancer. After numerous lawsuits, the company ran out of money.
Avon Products' Chief Restructuring Officer Philip Gund said the company has already spent $225 million defending against personal injury lawsuits and paying out settlements. The company now has no money to continue litigating or settling the cases.
The company stressed that none of Avon's operations outside the U.S. are part of the legal proceedings. “In international markets, business is business as usual, with the brand advancing strategic initiatives. API has not sold products in the U.S. since selling its North American business in 2016, but remains the holding company for the brand's non-U.S. operating units,” the statement said. Therefore, the bankruptcy will not affect the brand's operations outside the U.S.
The company also assured that the company's products do not cause harm. However, they expect the number of lawsuits to “only increase unless there is a final resolution.”
Meanwhile, Brazil-based Natura & Co, which acquired Avon in 2020, has entered into an agreement to buy Avon's non-U.S. operations for $125 million in a credit bid subject to a court-supervised auction. The company has also set aside an additional $43 million to fund the bankruptcy process and will write off $530 million of Avon's debt.
Note that Avon has been criticized for its cooperation with Russia, which has unleashed a war in Ukraine. The company is recruiting new sales agents in the Russian Federation and continues production in the Moscow region.
Recall that four companies producing UAVs have left Ukraine. This equipment will be sold, but jobs, taxes, engineers, experience – all this will remain abroad.
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