Pat McGrath Cosmetics, operating as Pat McGrath Labs, has reached a $30 million financing agreement with lender GDA PMG Funding. The deal includes $10 million in new debtor-in-possession financing and at least $20 million in post-emergency working capital, as founder Patricia McGrath transitions from CEO to chief creative officer.
Under the terms, GDA Luma will hold a controlling equity interest in the brand through a newly formed holding company, while McGrath retains a significant ownership stake. Specific details of her equity arrangement and employment agreement remain undisclosed. The full recapitalization is expected in the coming weeks, with Paladin Management Group serving as chief restructuring officer throughout the Chapter 11 bankruptcy process.
The agreement resolves previous tensions between McGrath and GDA following her January bankruptcy filing, which sought to halt GDA’s planned asset sale conducted without her direct involvement. McGrath had initially requested court approval for $1 million in self-provided financing, which GDA opposed, describing the founder as a “reckless” steward who pursued high-interest loans rather than negotiating recapitalization efforts.
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