Avon, Investors Seek First Court OK of $14.5 Million Settlement

Avon Products Inc. and its investors asked a New York federal judge for preliminary approval of a $14.5 million settlement that would resolve allegations the company misled investors about its Brazilian operations.

Investors accused the beauty products resale company of not telling them that it had loosened credit terms for its representatives in Brazil and wasn’t training them appropriately, leading to a stock drop. The Aug. 21 preliminary settlement approval motion came after the investors fought off Avon’s bid to dismiss the U.S. District Court for the Southern District of New York suit in 2019.

The claims involved Avon operations in Brazil and London, and further litigation “would have required significant discovery from both locations during the pandemic,” the investors said. There are “no guarantees that third parties located there would be willing or allowed to cooperate or travel.”

Levi & Korsinsky LLP served as lead counsel to the investors. They plan to seek “no more than 30%"—$4.25 million—of the settlement amount in attorneys’ fees, and up to $210,000 in litigation expenses, the investors said.

The investors also asked the court to preliminarily certify their proposed class for settlement purposes.

Cravath, Swaine & Moore LLP represented Avon.

The case is In re Avon Prods. Inc. Sec. Litig., S.D.N.Y., No. 19-cv-01420, preliminary settlement approval motion filed 8/21/20.