Last year, the iconic beauty brand Avon Products filed for bankruptcy protection after facing hundreds of lawsuits linking its talc products to mesothelioma and other cancers. This week, the judge overseeing the case indicated that the company’s Chapter 11 plan needs to address insurance carriers’ concerns before it can be approved.
Millions Awarded to Avon’s Mesothelioma Victims
According to the company’s bankruptcy filing, it carries more than $1.29 billion in debt owed to lenders and bondholders, in addition to liabilities for lawsuits accusing the company of causing mesothelioma and other cancers. The company has paid more than $225 million in defense costs and settlement payments since 2010, and there are at least 386 lawsuits pending. Jury trials have resulted in significant verdicts, including one in which the jury awarded the victim $24.5 million in damages and another in 2022 in which the company was found liable for $36 million in compensatory damages and approximately $10 million in punitive damages.
To cover these mesothelioma litigation costs, the company has turned to its insurer carriers, but coverage has been limited to approximately 15% of its liabilities. As a result, Avon took on more debt and now finds itself insolvent.
Insurers’ Express Concerns About Von Mesothelioma Claims
After reviewing Avon’s bankruptcy plan and hearing objections from the company’s insurers, U.S. Bankruptcy Judge Craig T. Goldblatt said “tweaks” were needed to ensure that the company’s proposed trust fund using insurance coverage proceeds was fair. The insurers object to the proposed plan’s abandonment of defenses to talc claims; they worry that they would be barred from contesting mesothelioma claims in court.
In response, Avon argued that mesothelioma claimants would be given the choice of an expedited $10,000 payment or up to $3 million after an individual review of their claim. The company’s representative asserted that this would not inflate claims, and that the insurers would still be able to fight coverage if they questioned the results of the review. The judge ordered Avon to prepare a revised version of the plan for the insurers to review.
If you or someone you love has been diagnosed with mesothelioma after exposure to Avon products, the Patient Advocates at Mesothelioma.net can help. Contact us today at 1-800-692-8608 to learn more.
