41-year-old cosmetics company files for Chapter 11 bankruptcy

Fierce competition is one of the biggest challenges for the cosmetics sector, which consists of 5,085 businesses in the cosmetics and beauty products manufacturing industry that generated about $39.3 billion in revenue in 2025, according to research firm IBISWorld.

Cosmetics businesses also face economic issues that all retailers deal with, including rising costs of labor and products driven by inflation, rising interest rates on their debts, and increased tariff costs, which can lead to out-of-court restructurings or bankruptcy filings.

For some cosmetics brands, like iconic retailer Avon Products, litigation related to asbestos exposure due to talc products buried the company in debt and forced it to file for bankruptcy in August 2024.

And now, similar litigation has forced another cosmetics company to file for bankruptcy protection.

Miyoshi America files for bankruptcy

Miyoshi America Inc., a leader in surface-treated pigments and powders for major cosmetics brands, filed a prepackaged Chapter 11 plan of reorganization seeking to resolve alleged talc- and asbestos-related liabilities asserted in lawsuits against the company and continue operating in a business-as-usual manner.

Miyoshi filed its petition in the U.S. Bankruptcy Court for the Southern District of Texas on April 27, listing $10 million to $50 million in assets and liabilities, which includes about $30.7 million in assets.

The debtor owes $15 million in funded debt to its parent company, Miyoshi Kasei Inc., according to court papers.

Miyoshi seeks DIP financing

Miyoshi America will seek $20 million in debtor-in-possession financing from its parent company, consisting of $5 million in new money and a roll-up of its $15 million in prepetition debt.

Under the plan of reorganization that needs court approval, the Dayville, Conn.-based debtor would create a $20 million trust to pay claims related to litigation, according to a declaration by Miyoshi Vice President Edward Houlihan.

Debtor creates $20 million litigation trust

Miyoshi would create a 524 (g) trust, funded by a $19 million cash contribution by the debtor and a $1 million promissory note.

"I believe that the filing of the Chapter 11 case and the creation of the trust under sections 524 (G) and 105 (a) of the bankruptcy code for the benefit of holders of talc personal injury claims represents the most efficient and expeditious means for Miyoshi to reorganize and continue operating while also providing fair and equitable treatment to holders of current and future talc personal injury claims," Houlihan wrote.

In consideration of the trust contributions, the reorganization plan provides for a talc personal injury channeling injunction prohibiting holders of talc personal injury claims from asserting claims against the reorganized debtor, parent company Miyoshi Kasei Inc., and other protected parties arising from Miyoshi's sale of talc before it emerges from the Chapter 11 case.

25 law firms seek injury claims

The debtor listed 25 law firms in its petition with pending talc personal injury claims against the company.

Miyoshi denies all talc-related or asbestos-related liability, but the costs associated with litigating and settling talc personal injury claims are not sustainable for the company's continued operations, the declaration said.

"I understand that the tools and protections available under Chapter 11 will facilitate the process leading to the confirmation of the plan, and I am confident that this path will provide a resolution for both Miyoshi and its stakeholders," Houlihan wrote in the declaration.

Company launched in 1985

Miyoshi launched in 1985 as U.S. Cosmetics Corp., and in 1997 merged with Miki America Inc., which bought U.S. Cosmetics Corp.'s assets. The company changed its name to Miyoshi America Inc. in 2016.

The debtor employs about 62 workers at its facilities in Dayville, Conn., and Valley Cottage, N.Y.

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