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Pat McGrath Labs Files for Bankruptcy, seeking Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Florida, according to a petition dated Jan. 22, marking a dramatic turn for a once-unicorn beauty brand.

The filing, first reported late Sunday by Women’s Wear Daily, has pushed an anticipated asset sale off the calendar indefinitely. A company spokesperson said Pat McGrath Labs will continue operating while it works to reorganize its finances — a hallmark of Chapter 11, which allows businesses to keep the lights on as they renegotiate with creditors.

Asset Sale Paused, Operations Continue

Chapter 11 as a financial pause button

The postponed sale had been slated for Tuesday but is now on hold as the company restructures its balance sheet. Chapter 11 functions like a financial time-out, giving companies room to reset while maintaining day-to-day operations.

Court filings list estimated liabilities between $50 million and $100 million. In tandem with the bankruptcy petition, the company submitted emergency motions seeking approval to pay $426,402 to critical vendors and $689,324 to cover employee wages, salaries and other compensation.

From Billion-Dollar Glow to Valuation Fade

Founded in 2015 by renowned makeup artist Pat McGrath, the brand once shimmered at the top of the cosmetics world. In 2018, private equity firm Eurazeo invested $60 million, valuing the company at more than $1 billion. Eurazeo quietly exited in 2021 as the brand’s fortunes dimmed.

By 2024, fellow investor Sienna Investment Managers marked down its stake by 88%, implying a valuation closer to $174 million, and signaled plans to exit in 2025. The now-delayed Jan. 27 auction had been designed as part of a broader restructuring effort.

Company representatives told The Business of Beauty in December that the sale would “allow Pat McGrath Labs to move forward in a productive and healthy environment.” For now, that path runs through bankruptcy court.