Avon declares bankruptcy in the US after accumulating debts for talc linked to cancer

The World Health Organisation (WHO) declared in July that talcum powder is potentially carcinogenic. The situation that led many people to sue the company Johnson & Johnson (J&J) for the alleged presence of carcinogenic components in its talcum powders, such that the company had to suspend the sale of this product worldwide.

Another cosmetics company, Avon, has declared bankruptcy over a similar product. Natura &Co., the Brazilian conglomerate that owns Avon, announced that its subsidiary Avon Products, Inc. (API) has initiated a Chapter 11 bankruptcy protection process in the United States, which seeks to manage pre-existing debts and liabilities, affecting exclusively API and other non-operating subsidiaries in the US market.

Chapter 11 bankruptcy is designed to allow companies experiencing severe financial difficulties to restructure their debts and continue their operations outside the United States, which does not seem to affect other markets.

Avon stopped selling in North America in 2016, but continues to operate as a holding company outside the country. Brazilian group Natura & Co, which acquired Avon in 2020 and is the company’s largest creditor, expressed confidence in the brand and has announced a commitment to finance with $43 million as debtor in possession, which will provide sufficient liquidity to finance API’s (Avon) obligations during the process.