Ben Nye, the storied Hollywood makeup artistry brand, has filed for Chapter 11 bankruptcy in the Central District of California to protect itself against a flurry of talc lawsuits and salvage its business.
Chapter 11 bankruptcy enables the brand to put a hold on the suits it’s facing and reorganize. Ben Nye’s goal is to end the financial burden of disputing talc lawsuits that have engulfed the beauty and personal care industries, the highest profile of which involve Johnson & Johnson’s baby powder and people with mesothelioma and ovarian cancer.
Ben Nye’s bankruptcy filing, which was made on March 11, discloses it has estimated assets of roughly $1 million to $10 million and estimated liabilities of $100,001 to $500,000. The brand is expected to emerge from bankruptcy later this year.
In a letter emailed to Beauty Independent, Ben Nye president Dana Nye wrote, “The company has incurred monumental legal fees to defend itself. As a family-owned company we reached the point where we could not continue to pay such fees…Despite the painful bankruptcy process, we believe this is the best decision to protect our business. This will allow us to move forward to focus on our business rather than to constantly fight claims thrown at us.”
The letter states that Ben Nye has sufficient cash to stay afloat. In it, Nye stresses that the brand isn’t changing its product quality, and the bankruptcy won’t interrupt wages and benefits for its 35 employees or product shipments to its wholesale partners.
Unusual for a beauty brand, Ben Nye doesn’t sell in direct-to-consumer distribution. It instead relies on a global network of about 500 wholesale partners to sell its products. Among the brand’s wholesale partners are professional makeup retailers, costume shops, schools and theater companies. Ben Nye has about 1,600 stockkeeping units priced mostly from $8 to $78. Its bestseller is the setting spray Final Seal, and its Student Theatrical Creme Kits are staples of school productions.
“Their prices are really competitive and fair, and their product is amazing. What Dana has done is created a lot of things that feel like more expensive brands, but the prices are so great and the color assortment is so extensive that there is something for everyone,” says Melissa Starin, director of merchandising at Alcone Company, a cosmetics retailer carrying Ben Nye. “We have such a great relationship with them because people love it, and they love it all over the world.”
“This will allow us to move forward to focus on our business rather than to constantly fight claims thrown at us.”
Talc lawsuits stem from cosmetics containing talc being contaminated with asbestos, a mineral known to cause rare cancers such as mesothelioma. In the past, Ben Nye used talc in its face powders, but its talc suppliers conducted analyses showing no asbestos was detected in the talc provided to Ben Nye.
As of January this year, the brand stopped using talc in its face powders, although Eric Nye, sales and marketing manager at Ben Nye, says talc is still used in other products “primarily as a grinding agent for pigments.” Ben Nye manufactures its products in-house. Popular face powders from the brand are Colorless Luxury Face Powder, Cameo Luxury Face Powder, Topaz Luxury Face Powder, Dark Chestnut Luxury Face Powder and Banana Luxury Powder, a product makeup artist Mario Dedivanovic shot to fame.
Chronicled in its Chapter 11 bankruptcy filing, Ben Nye’s talc-related asbestos legal battles date back to 2004, when consumer Audrey Giero claimed personal injury from exposure to asbestos she alleged was in the brand’s face powder. The case was dismissed in 2005. However, the brand spent $50,000 to defend itself.
Seventeen years later, another consumer, David Rody, brought a case against 60 defendants, including Ben Nye. The brand spent nearly $514,000 in legal fees to fight the case, which was settled for $37,500 in May last year. Since then, Ben Nye has been named in eight more asbestos lawsuits that also name big companies such as Walgreens and Maybelline.
All told, Ben Nye estimates its legal fees amounted to $778,747 from 2021 to 2023, and a trial scheduled to start this month could’ve led to it incurring additional legal fees of $400,000 to $500,000. Ben Nye asserts that legal fees coupled with declining revenues—its sales fell from $5.8 million in 2022 to nearly $5.6 million last year, when the actors and writers’ strikes affected makeup artists’ jobs—are undermining its ability to operate and maintain its defense.
A Hollywood makeup artist for over four decades, Ben Nye worked on “Gone with the Wind,” “Miracle on 34th Street,” “The Fly,” “Valley of the Dolls” and “Planet of the Apes.” He established his namesake makeup company in 1966 with cosmetics designed for movies and television programs that require product durability and intensity. Ben Nye’s son Dana Nye, who became the company’s sole owner in 1979 until he assigned his shares to a family trust in 2020, became president of Ben Nye in 1975. Eric Nye is Ben Nye’s grandson.
For Lee Lichlyter, owner of Camera Ready Cosmetics, a retailer stocking Ben Nye, the main concern with any product his company sells is safety, and he’s confident that Ben Nye’s products are safe based on assurances from the brand. A secondary concern is business reputation, and Lichlyter thinks Ben Nye will resurface from bankruptcy with its reputation intact.
“In the beauty industry, there can almost be a mob mentality sometimes where word of mouth gets around and a product, brand or individual could get a bad reputation. I don’t think that’s the case here,” he says. “They are such a reputable company. They have always been focused on their product efficacy. I am going to stand by them and make sure they aren’t tainted in the process.”
