23andMe, the once-high-flying genetic testing giant previously valued at billions of dollars, has formally notified customers of its ongoing bankruptcy proceedings, urging those potentially impacted to file claims by July 14.
The company, along with 11 affiliated subsidiaries—including telehealth service Lemonaid Health and the pharmaceutical subsidiary LPRXOne—initially filed for Chapter 11 bankruptcy protection on March 23 in the Eastern District of Missouri. The move came after a year and a half of setbacks characterized by declining revenues, departures among senior executives, and a severe cybersecurity breach that shook public confidence.
This breach, disclosed in October 2023, exposed sensitive personal details of nearly seven million customers, including names, dates of birth, genetic relationships with family members, ancestry data, and user-reported geographic locations. The fallout was extensive; numerous class action lawsuits ensued, dramatically undermining 23andMe’s reputation and curtailing its consumer-focused business.
Affected customers specifically impacted by the breach between May and October 2023 are eligible to submit “Cyber Security Incident Claims.” Anyone who incurred financial losses or other damages from the data leak can now file for compensation through the bankruptcy claims process. Furthermore, customers with grievances unrelated to the cyberattack—such as disputes regarding DNA test results or service dissatisfaction with the firm’s healthcare offerings—may file claims under a separate “General Bar Date” procedure.
Adding to the company’s troubles, the U.S. Congress expressed concern over the implications surrounding this bankruptcy, particularly regarding customer data privacy and the ongoing vulnerability of critical personal information housed by such consumer tech firms.
23andMe’s rapid decline was exacerbated by its ambitious, yet costly, expansion initiatives into the digital health and telemedicine sectors—most notably its $400 million acquisition of Lemonaid Health in 2021. These ventures were meant to diversify beyond its original DNA-testing platform but failed to deliver the anticipated growth and instead drained the company’s financial reserves.
Additionally, a proposed $30 million settlement of a class action lawsuit related to the cybersecurity incident has been placed on indefinite hold due to the current bankruptcy proceedings. Attorneys for 23andMe have indicated that the bankruptcy status casts uncertainty on the settlement agreement, meaning affected customers must file individual claims through the bankruptcy process to secure their rights to potential compensation.
