Forma Brands, the parent company of Morphe, Lipstick Queen and Jaclyn Hill’s Jaclyn Cosmetics, is considering filing for Chapter 11 bankruptcy, sources confirmed.

People acquainted with the method told WWD that such a move is into account, but stressed that nothing is for certain and that other options are on the table, including out of court agreements with creditors. 

A spokesperson for Forma said: “Forma Brands is engaged in constructive discussions with our financial stakeholders regarding ways to strengthen the corporate financially and enable us to bolster our deal with the opportunities we see ahead for our brands. We’re excited concerning the products we are going to proceed to bring to our customers.”

Majority owner, private equity firm General Atlantic, declined to comment. The news was first reported by Reorg Research.

General Atlantic acquired a 60 percent stake in Morphe in 2019, which was on the time a preferred brand run by brother and sister Chris and Linda Tawil that grew largely resulting from partnerships with influencers. The deal valued the corporate at $2.2 billion.

The Tawils had already taken Morphe from being a trade-show makeup brush brand right into a full-fledged operation by aligning themselves with the early makeup influencers corresponding to Jeffree Star and James Charles. 

When General Atlantic became involved, the business was at a high and profitable — on the time of its investment, Morphe was said to be doing about $500 million in net sales, with about $130 million in earnings before interest, taxes, depreciation and amortization.

But then several aspects occurred that weighed on Morphe’s performance. First, COVID-19 struck, leading color cosmetics sales to say no industry wide. Then Morphe cut ties with Star and Charles amid allegations of inappropriate behavior. Plus, supply chain issues plagued the business.

Forma, the parent company, was formed in 2020 as a part of the business’ diversification efforts. The business also launched a sub brand, Morphe 2, and made several acquisitions, including Lipstick Queen and Playa, and incubated brands, including Bad Habit. In March, former Too Faced executive Eric Hohl joined Forma as chief executive officer, taking up from Myles McCormick, who led the business through its growth era. Hohl was president at Too Faced when General Atlantic sold it to the Estée Lauder Cos. for $1.45 billion in 2016.

In 2021, Forma landed at number 80 on the Beauty Inc Top 100 list, with an estimated $350 million in sales.