Avon files for bankruptcy after hundreds of lawsuits over cancer claims and drowning in $1.3 billion debt
AVON Products Inc has filed for bankruptcy after multiple lawsuits and financial struggles.
The cosmetics company submitted its Chapter 11 filing in a Delaware court on Monday.
At least 386 talc-related suits have been filed against the brand over the past few years, and API intends to address those claims with the bankruptcy filing.
The talc cases resulted in about $225 million in expenses for legal defense costs and settlement payments.
Philip Gund, chief restructuring officer for API, said in the court filings that the company no longer has "sufficient liquidity to litigate an/or settle" any other cases.
API hasn't operated in the United States since 2016, when an independent entity known as The Avon Company separated from it to market merchandise exclusively in the United States, Canada, and Puerto Rico.
API markets Avon products internationally.
The Avon Company is not part of the bankruptcy proceedings and has no affiliation with Avon Products Inc.
Customers were reassured Tuesday that The Avon Company will operate as usual, per a .
SAVING GRACE
Natura & Co agreed to purchase the ownership share of API's international operations for $125 million through a credit bid, but nothing will be confirmed until there's a court-sanctioned auction, per a .
It would also dismiss the around $530 million API owes, and put up another $43 million for API as debtor-in-possession financing during the Chapter 11 proceedings, pending court approval.
API's newly-appointed CEO Kristof Neirynck said the company would move forward through the bankruptcy to keep its attention on international markets.
"We remain focused on advancing our business strategy internationally, including modernizing our direct selling model and reigniting the brand to accelerate growth," Neirynck said in the release.
"Since becoming CEO earlier this year, I am increasingly energized by our strengths and opportunities, supported by our valued Associates and nearly 2 million Representatives around the world."
API's bankruptcy filing comes amid several from various retailers and restaurant companies across the United States this summer.
Today's action the proposed sale of Avon's non-U.S. operations will maximize the value of our assets and enable us to address our obligations in an orderly manner.
John Dubel
GONE FOR GOOD
Conn's Home Plus, a century-old furniture and electronics retailer, submitted its Chapter 11 filing in July.
It confirmed that it would close all 170 of its stores, with 70 shutting down over the next few months.
Several other brands under its umbrella — including Badcock Home Furniture & More, will also shut down locations.
A few fashion brands also shocked some customers with bankruptcy announcements this spring, followed by mass closures.
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Express filed for Chapter 11 back in April, with at least 100 stores axed.
It was soon followed by Rue21, which had filed for bankruptcy before in the early 2000s, but confirmed it would be closing all of its over 500 stores this time around.