Juul, Nick Pritzker End Case Challenging Bailout by Billionaire

Juul Labs Inc. and an affiliate of hotel billionaire Nick Pritzker have settled litigation they faced over rescue financing that would allegedly have “plundered” the vaping company.

The agreement on undisclosed terms resolves a case brought by a group of investment funds, led by affiliates of D1 Capital Partners LP and Sculptor Capital Management Inc. The suit, filed in October, said the proposed $1.9 billion debt-to-equity conversion would siphon value to corporate insiders including Pritzker’s venture firm, Tao Capital Partners LLC, while virtually wiping out the funds holding the notes.

The vaping company—which has confronted a barrage of ...