Forma will be taken over by a group of lenders, who are investing $33 million into the beleaguered company.
Court docs show that high-profile partners like Jeffree Star and James Charles are among its top unsecured creditors.
The bankruptcy filing arrives after Morphe shuttered all of its US stores last week.
Forma Brands, the parent company of Morphe – a beauty product purveyor that rose to renown in the late aughts for collaborating with top YouTubers like Jaclyn Hill, Jeffree Star, and James Charles – has filed for bankruptcy.
Per its Chapter 11 proceedings, Forma will be taken over by a group of lenders, including Jefferies Finance and Cerbereus Capital Management, who are investing $33 million into the beleaguered company.
In a press release, Forma said its "product development initiatives, brand launch plans, and marketing collaborations remain in place," and customers will still be able to shop its portfolio of brands.
Per its website, Forma's portfolio comprises Morphe, Morphe 2, Jaclyn Cosmetics, Bad Habit, Lipstick Queen, and Playa Beauty — the latter of which is suing Forma for $15 million, alleging it was sidelined after its acquisition, Business of Fashion reported earlier this month.
Although it built its business by galvanizing influencer buzz, some high-profile partners now appear in court documents among a list of its top unsecured creditors, Bloomberg notes. According to court documents, James Charles (whose real name is James Dickinson) has unsecured claims of $2.16 million, while Jaclyn Hill and Jeffree Star have unsecured claims of $2 million and $1.4 million, respectively.
And another high-profile partner, Ariana Grande, is looking to forge onward on her own. Allure, citing industry sources, reported that Grande's r.e.m beauty brand is finalizing plans to take its operations in-house. Forma did not have an ownership stake in the brand, per Allure, but oversaw the business via a licensing agreement.
The bankruptcy filing arrives after Morphe confirmed last Thursday that it was shuttering all of its US stores.
At the time, it faced criticism for surprising employees. One former store manager told Insider she'd noticed products being discounted at her Texas store location, which eventually had no stock to line shelves around the holidays. On December 22, she said all employees were notified that they were being laid off.
In a statement to Insider, the company cited "the broader beauty landscape throughout the last year" as the reason for the closures.
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