Avon Products, a holding company through which Avon’s non-US business operations are run, has filed for Chapter 11 bankruptcy in the US.

In an August 12th press-release, Avon framed its bankruptcy as “taking steps to address debt and legacy liabilities”.

Avon’s non-legal debts sit at around $1.29 billion. Avon’s “legacy liabilities” pertain to multiple lawsuits and settlements over talc-based products causing cancer.

Since 2020 Avon outside of the US has been owned by Natura & Co, a Brazilian cosmetics company. The bankruptcy will see Natura & Co

purchase the equity interests in Avon’s non-U.S. operations for $125 million in the form of a credit bid, subject to a Court-supervised auction process.

Avon in the US is run through The Avon Company, which was acquired by the Korean company LG Household & Health Care Ltd in 2016.

With the caveat that I’m not an expert in acquisitions, Natura & Co buying Avon’s non-US operations and then, following Chapter 11 bankruptcy filings, buying Avon’s non-US operations again goes over my head.

Reflecting its continued belief in the Avon brand, Natura & Co has committed up to $43 million in debtor-in-possession financing that, subject to Court approval, will provide sufficient liquidity to fund Avon’s obligations during the sale process.

Fox Business reports that

Avon’s operations outside the U.S. are excluded from the legal proceedings and will continue to operate as normal while the process plays out.

With respect to Avon’s legal liabilities, in a pay-walled article the Wall Street Journal reports;

Avon faced its first talc claim in 2010 and now 386 talc lawsuits are pending against it.

Avon said it has spent more than $225 million to defend itself against personal-injury lawsuits and to make settlement payments in connection with the talc claims.

Judgments against Avon in multiple liability lawsuits are approaching $35 million.

I’m kind of hoping Avon’s bankruptcy isn’t some loophole wherein Natura & Co “sells” off the company to itself so that Avon doesn’t have to pay victims of its alleged cancer-causing products.

Avon said it believes the talc claims are meritless but doesn’t have the liquidity to litigate or settle so many cases. It expects that the number of talc lawsuits “will only continue to increase absent a permanent solution,” Chief Restructuring Officer Philip Gund said.

Yeah, that’s not a good look.

From experience I’ve learned that trying to track bankruptcy proceedings as BehindMLM might otherwise track legal proceedings is a nightmare (too many filings that are simply too complicated to follow).

Because of this, I won’t be tracking Avon’s bankruptcy case docket. If there are any significant updates however I’ll leave an update note below.