Consumer hardware company Jawbone is being liquidated, according to The Information. The San Francisco-based company, which once was valued at $3.2 billion by private investors, has hired Sherwood Partners to handle the wind-down process and assume its ongoing litigation with rival FitBit.

Jawbone 2.0: Co-founder and CEO Hosain Rahman reportedly has formed a new company, named Jawbone Health Hub, that has hired many of Jawbone's employees and will take over servicing Jawbone's products. BlackRock, which loaned Jawbone $300 million in 2015, has a stake in the new company. No other existing Jawbone investor has a stake in the new startup, with one telling Axios that his firm has been kept in the dark.

Growing problems: Over the past couple years, Jawbone has faced many challenges, including lawsuits from FitBit and Flex, layoffs, and struggles to pay its bills. Last year, it sought to sell off its speaker business and sold the remaining inventory of its fitness bands to a third party seller, according to one report.

Backstory: Founded in 1999, Jawbone made its name selling Bluetooth cellphone headsets and hip portable speakers, later shifting to health trackers. It had raised more than $580 million in funding from top investors like Khosla Ventures, Mayfield Fund, Andreessen Horowitz, Sequoia Capital, and Kleiner Perkins.