Pat McGrath Labs Secures $30M Financing After Filing Chapter 11 Bankruptcy

It's new financing from an existing lender.

The future is looking brighter for Pat McGrath after the beauty company secured $30 million in financing following a Chapter 11 bankruptcy filing.

On Feb. 17, the company announced $30 million in new financing from existing lender GDA PMG Funding, Retail Dive reports. As part of the agreement, founder and makeup artist Pat McGrath will step down as CEO and serve as chief creative officer.

“Pat McGrath Labs is a house built on audacious artistry, cultural relevance, and singular creative vision—one that has shaped the modern beauty conversation for over a decade,” a press release stated. “GDA Luma undertakes this investment with profound respect for that legacy, combined with the operational discipline and strategic perspective of an experienced global investor with a proven track record of repositioning iconic brands for enduring success.”

The agreement includes $10 million in new debtor-in-possession financing and at least $20 million in post-emergence working capital. GDA Luma will take a controlling equity stake in Pat McGrath Cosmetics—commonly known as Pat McGrath Labs—with court filings showing the firm plans to create a holding company that will own the reorganized brand outright. McGrath is expected to remain a significant equity owner.

A full recapitalization of Pat McGrath Labs is expected to be finalized in the coming weeks, with Paladin Management Group serving as chief restructuring officer throughout the Chapter 11 process. The restructuring follows earlier tensions between GDA Luma and the beauty brand’s founder when the bankruptcy filing was first announced in January.

At the time of the bankruptcy filing, McGrath sought court approval for $1 million in debtor-in-possession financing she planned to provide herself, a proposal GDA Luma opposed. In her declaration, McGrath said she had been acting at her lenders’ direction for months and wanted to remain in control of Pat McGrath Labs.

GDA, however, accused her of mismanaging the company’s assets and taking on high-interest debt rather than pursuing recapitalization talks. With the new financing in place, McGrath is stepping into a reduced executive role as part of the effort to keep the brand alive.