23andMe Bankruptcy: Claims Deadline July 14 - What You Need to Know

23andMe Bankruptcy and Customer Claims

23andMe, formerly a genetic testing company with a multi-billion dollar valuation, is currently undergoing Chapter 11 bankruptcy proceedings. Millions of past and present customers have been informed of their potential eligibility to file claims as part of the financial restructuring.

The company, along with eleven of its affiliates – including Lemonaid Health and LPRXOne – initiated bankruptcy protection on March 23rd in the Eastern District of Missouri. A notification was sent to customers on Sunday, establishing a July 14th deadline for submitting claims related to incurred losses.

Recent Challenges for 23andMe

This bankruptcy follows a challenging period of 18 months for 23andMe. The company experienced declining sales figures, key personnel departures, and a significant data breach impacting user data.

The data breach, revealed in October 2023, compromised the sensitive personal information of approximately 7 million individuals. According to TechCrunch, exposed data included names, birth years, family relationships, DNA sharing percentages, ancestry reports, and self-reported locations.

This incident led to numerous class action lawsuits and a substantial loss of customer trust, negatively impacting the company’s direct-to-consumer business.

Filing a Claim

Customers affected by the data breach – those specifically notified by 23andMe about compromised information between May and October 2023 – can now file a Cyber Security Incident Claim.

Individuals who sustained financial or other damages as a result of the breach are eligible to submit a claim within the bankruptcy case. Customers with issues unrelated to the cyberattack, such as concerns about DNA test results or telehealth services, can submit a General Bar Date Package claim.

Congressional and Legal Scrutiny

The privacy implications of the bankruptcy have also drawn attention from members of Congress.

A proposed $30 million settlement in a class action lawsuit concerning the cyberattack is currently paused due to the bankruptcy proceedings. 23andMe’s legal representatives indicate the settlement is under review given the company’s current financial status.

Customers wishing to maintain their right to potential compensation must submit a formal proof of claim, irrespective of their involvement in the class action lawsuit.

Expansion and Financial Strain

23andMe’s rapid decline was accelerated by its ambitious, yet expensive, expansion into digital health and telemedicine. This included the $400 million acquisition of Lemonaid Health in 2021.

While intended to diversify beyond consumer DNA testing, these moves placed a strain on 23andMe’s financial resources and ultimately failed to generate the necessary growth.

TechCrunch has contacted 23andMe for further comment.