New York.- Cosmetics company Avon has filed for bankruptcy in the United States to address its debt and legal liabilities arising from lawsuits alleging that its talc-based products were contaminated with cancer-causing substances, it said in a statement.
The firm has begun the process to request Chapter 11 protection from the Bankruptcy Court of the District of Delaware (USA), which allows companies to continue operating while they develop a plan to pay their debts.
“Avon’s operating businesses outside the U.S., which continue to advance strategic initiatives, are not part of the Chapter 11 proceedings, and operations continue as usual in Avon’s international markets,” the company said in a statement Tuesday.
Brazil-based Natura & Co. acquired Avon in 2020, signing a deal to buy equity stakes in the cosmetics firm’s operations outside the United States for $125 million.
The Brazilian group announced a commitment to finance it with $43 million as debtor in possession, which will provide, according to the statement, “sufficient liquidity to finance Avon Products’ obligations during the process.”
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“We remain focused on driving our commercial strategy internationally, l“This includes modernizing our direct sales model and reviving the brand to accelerate growth,” said Kristof Neirynck, Avon’s chief executive, adding that he is “increasingly encouraged” by the strength and opportunities of the cosmetics company.
In December 2022, a Los Angeles jury ordered Avon to pay more than $50 million to an Arizona woman who said she was diagnosed with cancer after using cosmetic products containing asbestos-contaminated talc.
Last month, a jury awarded $24.4 million to a Chicago-area man who worked as a janitor at an Avon manufacturing plant in Illinois after he was diagnosed with mesothelioma. However, Avon has denied claims that its talc-containing products cause cancer.
