The Stephan Co., a Florida-based holding company for beauty and barber supply distributors, filed for Chapter 11 bankruptcy protection on November 26, 2025, to address more than 700 lawsuits alleging injuries from talc products manufactured by a company it acquired in 1988. The filing in the U.S. Bankruptcy Court for the Middle District of Florida in Tampa seeks to establish a trust to handle current and future talc-related personal injury claims through a reorganization plan incorporating Section 524(g) of the Bankruptcy Code.
The company faces over 700 lawsuits, with over 500 currently active, despite never having been found liable in any talc lawsuit. The company has settled 15 cases and had approximately 200 dismissed on its motion. According to the bankruptcy filing, the company's current insurance coverage will eventually be exhausted by settlements or judgments, and the company lacks the financial ability to remain in the tort system.
The primary purpose of the Chapter 11 filing is to address and comprehensively resolve the debtor's present and future talc-related personal injury liabilities through a plan incorporating a Section 524(g) trust and channeling injunction. The decision to file was prompted by the growing number of talc lawsuits, increased settlement demands, anticipated future claims, and limited insurance coverage.
Background on Old 97 Company and Talc Litigation
The Stephan Co.'s talc exposure stems from its 1988 acquisition of Old 97 Company, a Tampa, Florida-based company that manufactured cosmetics, toiletries, and household products. Old 97 served as a contract manufacturer for Gold Bond products and produced talc products under the Gold Bond label, as well as a talc product marketed under the trade name Cashmere Bouquet.
Old 97 ceased manufacturing Gold Bond and any other talc products before The Stephan Co. merged with Old 97 in 2016. At the time of the merger, the company was unaware of any potential talc personal injury claims, according to the filing. Old 97 had been a wholly-owned subsidiary of The Stephan Co. since the 1988 acquisition.
In 2019, The Stephan Co. was first named as a defendant in talc personal injury lawsuits as an alleged successor in liability to Old 97. The lawsuits allege personal injuries caused by exposure to products containing talc allegedly contaminated with asbestos. As of the petition date, the number of lawsuits has risen to over 700, with over 500 active cases. The company has defense counsel teams in at least 10 states managing the talc lawsuits.
Company Operations and Financial Position
The Stephan Co.'s predecessor was founded in Worcester, Massachusetts in 1892, producing barber equipment and surgical tools. The company was recognized as the first men's hair care company in the United States and by 1920 was generating annual revenues of $5 million. In 1952, the company incorporated as a Florida corporation and moved its headquarters to Fort Lauderdale.
The Stephan Co. currently operates as a holding company for three operating company subsidiaries that manufacture and distribute barber, beauty, and personal care products throughout the United States and select markets overseas. The three subsidiaries are 614 Barber Supply, Inc., Bowman Beauty & Barber Supply, Inc., and Morris Flamingo-Stephan, Inc. These subsidiaries are not debtors in the Chapter 11 case.
In 2023, the debtor and subsidiaries reported aggregate annual revenue of $10,582,000 and gross profit of $2,648,000. In 2024, they reported aggregate annual revenue of $9,959,000 and gross profit of $2,866,000. The debtor independently reported no revenue in 2025 and a net loss of $352,000. The debtor and subsidiaries collectively employ around 25 part- and full-time individuals.
According to the consolidated balance sheet as of September 30, 2025, total assets were $10,295,000, total liabilities were $2,811,000, and total stockholders' equity was $7,484,000. As of the petition date, the company had $39,310.38 in its M&T Bank checking account, $0 in a sweep account, and $27,198.85 in a Fidelity Investments investment account.
Insurance Settlement and Proposed Reorganization
The debtor's liabilities and costs under the talc lawsuits have been primarily covered by insurers Fireman's Fund Insurance Company and Liberty Mutual Insurance Company. The filing states that the debtor cannot reliably estimate the costs associated with litigating and settling the remaining talc lawsuits, but the projected amount is in the tens of millions. The debtor expects that once its indemnity insurance coverage is exhausted and funding for defense costs also ceases, its existing assets will be insufficient to cover even a fraction of such liabilities.
The debtor reached a settlement agreement with FFIC in November 2025 for FFIC to buy back all of its relevant insurance policies. The bulk of the proceeds from the policy buyback would be contributed to the proposed Section 524(g) trust. The settlement agreement is referred to in the filing as the FFIC Settlement Agreement.
The debtor determined that commencement of the Chapter 11 case and policy buyback incorporated into a reorganization plan is the best option to protect the estate and preserve value. The filing states that the debtor lacks the financial wherewithal to remain in the tort system, and the proposed recoveries for talc personal injury claims under a 524(g) plan significantly exceed the alternative, which would be the liquidation of the debtor and potentially its subsidiaries.
Prepetition Negotiations
Prior to seeking bankruptcy relief, the debtor contacted counsel representing the largest numbers of individuals asserting talc personal injury claims and engaged in discussions regarding a possible consensual Chapter 11 plan incorporating a trust and supplemental channeling injunction in accordance with Section 524(g) of the Bankruptcy Code.
The debtor proposed formation of an ad hoc prepetition committee of talc personal injury claimants. The Prepetition Talc Claimants' Committee was formed and retained Caplin & Drysdale as counsel. After committee members signed non-disclosure agreements, the committee received various confidential documents and detailed information from the debtor in response to information requests. Preliminary discussions were held regarding the proposed plan and Section 524(g) trust.
The debtor expects that the Prepetition Talc Claimants' Committee will likely become an official committee now that the petition has been filed and that discussions will continue in furtherance of a consensual plan.
The debtor retained bankruptcy counsel Verrill Dana LLP and financial advisor Getzler Henrich & Associates LLC in mid- to late 2025 to begin evaluating strategic options to resolve the debtor's talc-related personal injury liabilities.
First Day Relief Requests
The debtor filed several first-day pleadings seeking orders granting various forms of relief intended to stabilize business operations, facilitate efficient administration of the case, and expedite reorganization.
The debtor seeks to retain Kroll Restructuring Administration LLC as claims, noticing, and solicitation agent. The debtor believes that distribution of notices and processing of claims will be expedited by Kroll's retention, and the Office of the Clerk of Court will be relieved of the related administrative burden.
The debtor requests authority to file a list of law firms representing the largest numbers of talc personal injury claims, rather than a list of the holders of the twenty largest unsecured claims against the debtor. The debtor also seeks to list addresses of known counsel of record for holders of talc personal injury claims on the creditor matrix, in lieu of the addresses of the claimants themselves, and to implement a procedure whereby required notices and communications will be sent to counsel of record rather than to claimants directly.
The debtor notes that hundreds of talc personal injury claims have been filed against it, and nearly all known contingent creditors are holders of such claims. Because the holders assert unliquidated claims, it would be impossible to determine which holders have the largest unsecured claims. It is rare for holders of talc personal injury claims to assert specific damages amounts in their complaints. The debtor does not have the information necessary to populate a list with the personal information of talc claimants, rather than the law firms representing such claimants.
The debtor seeks authority to maintain existing insurance policies and pay obligations arising therefrom, including premiums, deductibles, and administration fees. The insurance policies provide coverage for general liability, director and officer liability, workers' compensation liability, commercial liability, marine cargo liability, cyber risk liability, and medical, vision, and dental coverage for the debtor and its non-debtor subsidiaries. For the policy period of 2025 to 2026, the debtor anticipates total premiums under the insurance policies to be approximately $152,000.
The premium for the director and officer liability policy was financed through IPFS Corporation pursuant to a premium financing agreement. The debtor made a cash down payment of $10,009.00 and is required to make eleven monthly payments of $2,846.69, with the first payment due December 18, 2025 and the final payment due October 18, 2026. The obligations are secured by a security interest in the policy.
The debtor also seeks authorization to maintain its cash management system and existing bank accounts, honor certain prepetition obligations related thereto, maintain existing business forms, and perform intercompany transactions consistent with past practices. The cash management system is integrated with the debtor's non-debtor subsidiaries and facilitates cash monitoring, forecasting, and reporting.
To fund retainers for its professionals in connection with the Chapter 11 case, the debtor entered into an intercompany transaction in the form of an intercompany note with Bowman Beauty dated November 26, 2025. Pursuant to the note, Bowman Beauty loaned the debtor $565,947.00, subject to interest, to fund the requisite retainers. The note matures on its first anniversary.
Secured Creditors
The debtor serves as a guarantor for two separate loans, each between one of its subsidiaries and M&T Bank. The debtor's guarantees are secured by all of its money, securities, and other property in actual or constructive possession or control of M&T Bank and its affiliates.
One loan to 614 Barber Supply has an outstanding balance of $129,529.72. Another loan to Bowman Beauty has an outstanding balance of $312,757.81. As of the petition date, the loans are not in default. The debtor estimates general unsecured claims of $442,287.53, representing the amounts the debtor guaranteed on the M&T Bank loans to the extent they are not secured.
Company Leadership
Henry Jacobi serves as the debtor's Chief Executive Officer, as well as President and Treasurer of the three operating subsidiaries. Jacobi has served as CEO since October 2023. Prior to that, he held various senior management positions within the distribution side of a range of industries. He has a master's degree in Corporate Public Affairs from George Washington University and an undergraduate degree in economics from Ithaca College.
Jad Fakhry is a director of the debtor and owns approximately 37 percent of shares in the debtor, both directly and indirectly through Poplar Point Capital Management LLC. Joel Getz is a director of the debtor and serves as its secretary, owning approximately 1 percent of shares. Brian Harper serves as Chairman of the Board of Directors and owns approximately 13 percent of shares, both directly and indirectly through Harper Asset Management, LLC.
Each director receives shares in the debtor in exchange for service on the board pursuant to the Directors Incentive Share Plan adopted in 2018. Additionally, each director receives a monthly director fee of $2,000 for services performed as director.
Case Information and Legal Representation
The Chapter 11 case was filed in the United States Bankruptcy Court for the Middle District of Florida, Tampa Division, under case number 8:25-bk-08937-CPM. The debtor's federal tax identification number ends in 6812, and its mailing address is 2211 Reach Road, Suite B4, Williamsport, Pennsylvania 17701.
Verrill Dana LLP serves as proposed counsel to the debtor, with Robert J. Keach, Letson D. Boots, and Jennifer S. Novo listed as attorneys. Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A. also serves as proposed counsel, with Patricia A. Redmond as the attorney. The declaration in support of the first day motions was signed by Henry Jacobi under penalty of perjury on November 26, 2025.
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