Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Wednesday, March 4. In today's briefing, a Blackstone fund was hit with heavy redemptions, fanning concerns that individual investors are proving more flighty than the direct-lending industry would like to believe. 

Blackstone's flagship credit fund hit with redemptions. Outflows topped inflows by a record $1.7 billion in Blackstone’s massive $82 billion private-credit fund in its latest quarter.

The fund, known as Bcred, paid back shareholders who redeemed their investments in the most recent financial quarter, reflecting the extraordinary steps asset managers are taking to calm clients amid mounting fear about potential losses in private credit.

• Private-credit stocks also sank to new lows. Blackstone shares fell 3.8%, down by more than 40% from their 2024 all-time high, while Blue Owl declined 3.8% as well, more than 60% below a record from a little more than a year ago.

Pat McGrath hands over cosmetics company to lender. Legendary makeup artist Patricia McGrath, known for making Taylor Swift’s favorite red lipstick, is set to hand over the keys to her eponymous cosmetics company to bankruptcy lender GDA Luma.

According to a reorganization plan filed Monday, distress debt investor GDA Luma will own 65% of the company. Existing equity holders will receive 5% in new common stock as “a gift” from GDA. The deal is subject to a bankruptcy judge’s approval and slated to be heard in court on Thursday.

Pat McGrath Cosmetics filed for bankruptcy in Florida in January after “years of financial neglect,” court records show. The cosmetics company, which popularized the “glass skin” trend, fell behind on vendor payments and struggled to repay a bridge loan from GDA Luma before filing. –Alicia McElhaney

Justice Department makes abrupt reversal on law firm sanctions. The Justice Department told a court Tuesday that it plans to press forward with the defense of President Trump’s executive orders sanctioning law firms, a remarkable reversal coming less than 24 hours after it asked to drop the cases.

Share your tips, suggestions and feedback with the WSJ Pro Bankruptcy team: Alexander Gladstone; Jodi Xu Klein; Akiko Matsuda; Alicia McElhaney; Andrew Scurria; Becky Yerak. 

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