23andMe customers notified of bankruptcy and potential claims — deadline to file is July 14

After being valued in the billions, genetic testing giant 23andMe is now facing Chapter 11 bankruptcy and reaching out to millions of current and former customers to inform them about the opportunity to file claims as part of the restructuring process. The company, along with 11 subsidiaries including Lemonaid Health and LPRXOne, filed for bankruptcy protection on March 23 in the Eastern District of Missouri. Customers have until July 14 to submit claims for any losses they have experienced.

The past 18 months have been challenging for 23andMe, with declining sales, key executives leaving, and a significant data breach that exposed sensitive personal information of nearly 7 million users. The breach, disclosed in October 2023, compromised customers’ names, birth years, relationship labels, DNA shared with relatives, ancestry reports, and self-reported locations. This breach led to multiple class action lawsuits and a loss of trust among customers, significantly impacting the company’s consumer business.

Customers affected by the breach, particularly those notified by 23andMe between May and October 2023, can file a Cyber Security Incident Claim if they have suffered financial or other damages. Those with other grievances unrelated to the cyberattack, such as issues with DNA test results or telehealth services, can submit a claim under the General Bar Date Package.

Concerns about privacy implications have been raised by Congress regarding the bankruptcy process.

The company’s expansion into digital health and telemedicine, including the acquisition of Lemonaid Health for $400 million in 2021, strained 23andMe’s financial resources and did not generate the anticipated growth. A proposed $30 million settlement for a class action lawsuit related to the cyberattack is currently on hold due to the bankruptcy. Customers must file a formal proof of claim to preserve their right to compensation, regardless of their participation in the class action.

JS has reached out to 23andMe for comment.