The famous cosmetics company declared bankruptcy due to debts exceeding one billion US dollars.

The famous brand of beauty products, Avonhas filed for bankruptcy in an attempt to relieve more than $1 billion in debt stemming from lawsuits over talc-based products allegedly contaminated with carcinogens.

The procedure that was formalized under the protection of Chapter 11 In the United States on Monday, August 12, 2024, the company’s lack of liquidity reflects 386 lawsuits related to the use of talc in its products, which allege cancer-causing problems, the British newspaper confirmed. The Guardian.

The brand you acquired nature As of 2020, it had accumulated debt of $1.3 billion and had specific liabilities related to talc claims of $78 million. The American company has so far set aside $225 million for defense costs and settlement payments for these lawsuits, and maintains that it does not have the funds to deal with the ongoing lawsuits.

As part of the restructuring process, nature Proposed repurchase of business operations Avon Outside the United States for $125 million, an offer that will be subject to a court-supervised auction. “If Natura’s bid is successful, the company plans to write off $530 million of the $1.27 billion owed to it.”

“This action and the proposed sale of Avon’s international operations will maximize the value of our assets and allow us to address our liabilities in an orderly manner.“, He said John Doublepresident Avon Productsas reported Fox Business.

For her part, Christoph NerinkThe brand’s CEO said the company is focusing on developing its commercial strategy internationally, updating its direct sales model and revitalizing the brand to accelerate its growth.

Despite financial problems, operations Avon Business will continue as normal and no job cuts are expected, according to information received from Washington PostThe company is headquartered in NorthamptonIt directly employs 5,000 people and has millions of sales agents around the world.

The famous advertising slogan “Ding Dong! Avon Calling“The door-to-door method of selling has been a hallmark of the company since its beginnings of more than 135 years, which began with David H. McConnella traveling bookseller from New York.

These business moves by the cosmetics brand come at a time when other companies, such as Johnson & JohnsonThey also tried to use bankruptcy as a strategy to deal with lawsuits related to talc products. Johnson & Johnson has not yet been able to resolve its claims in this way.