A Delaware bankruptcy judge granted interim approval Wednesday for Avon Products Inc. to access part of a $43 million debtor-in-possession (DIP) financing package as the cosmetics giant navigates its Chapter 11 bankruptcy proceedings. The approval, issued by U.S. Bankruptcy Judge Craig T. Goldblatt, allows Avon to draw $12 million immediately to fund its ongoing operations and bankruptcy case.
Avon $43M DIP Acceptance : Interim Approval for DIP Financing
The interim approval is a crucial step for Avon as it attempts to stabilize during bankruptcy and complete the sale of its non-U.S. operations to its Brazilian parent company, Natura. The company also faces hundreds of lawsuits related to legacy talc liabilities, which have significantly impacted its financial stability.
“I’m satisfied that the relief sought is appropriate,” Judge Goldblatt said during the hearing, signaling his agreement with Avon’s need for immediate financing to support its restructuring efforts.
Background and Financial Struggles
Founded in 1886, Avon gained widespread recognition for its door-to-door sales model, employing nearly 2 million sales representatives worldwide. However, the company has faced increasing legal challenges due to allegations that its former U.S. business sold talc-based products containing cancer-causing asbestos.
