Key Takeaways:Pat McGrath Labs will exit the Chapter 11 process after months of deliberations and a week of hearings in a Florida bankruptcy court.Miami-based investment firm GDA Luma, the brand’s largest creditor, will assume control of Pat McGrath Labs by establishing a new holding company.In the deal, founder Pat McGrath will transfer her equity to GDA Luma and assume the role of Chief Creative Officer.The process was a textbook lender‑to‑owner Chapter 11 outcome: debt converts into control, legacy shareholders are heavily diluted or wiped out, and the founder is kept to preserve brand equity and creative continuity.WHO:Pat McGrath launched the Pat McGrath Labs makeup line in October 2015 with a limited-edition launch of 1,000 pieces of Gold 001, a $40 gold multipurpose pigment that sold out in six minutes. This initiated a series of product drops that McGrath orchestrated during the lead-up to the broader collection launch in September 2017, which was rolled out to Sephora stores.GDA Luma, the Miami-based investment firm founded by entrepreneur Gabriel de Alba, focuses on distressed, special situations, and control-oriented investments in mid-market businesses.WHY: During the bankruptcy process, court filings show that the brand was shopped to potential acquirers with 66 parties contacted, with only one making an offer that was “materially” below the $43 million GDA Luma alleged was owed.IN THEIR OWN WORDS: “I’m happy for you that you will be able to continue the legacy and the company that you love,” Judge Laurel Isicoff told McGrath, “I look forward to being in a position where I can actually go buy the makeup.