PAT McGRATH LABS

The beauty brand entered into a loan agreement in April 2025 with GDA that was intended to serve as a short-term solution for Pat McGrath Cosmetics’ financial issues, according to the Chapter 11 declaration filing. Pat McGrath Cosmetics then amended the agreement with GDA a few months later that “significantly increased GDA’s control over” incoming revenues.

McGrath said the brand faced a disagreement about material obligations with one lender, GDA PMG Funding, wherein the brand allegedly received $17.5 million in loan advances, but the lender asserts there is a $43 million outstanding balance, according to the filing. GDA filed an objection to the proposed DIP financing on Tuesday, stating that GDA is owed $30.5 million in principal, exclusive of certain interest and fees.

“Pat McGrath Labs was Pat McGrath. She is the CEO, she is the founder, she’s the creative director. The buck stops with her,” she told FashnFly. “With final say on everything from product formulation to packaging, this all-encompassing control created a bottleneck that affected every part of the business. The result was a company where decision-making was slow and fragmented.”