23andMe Customers Face Bankruptcy Claims Deadline: July 14

Genetic testing company 23andMe, once valued in the billions, is currently undergoing Chapter 11 bankruptcy proceedings, prompting a notification to its millions of current and former customers about their potential eligibility to file claims. The company, along with 11 of its subsidiaries, including Lemonaid Health and LPRXOne, filed for bankruptcy protection on March 23 in the Eastern District of Missouri. An alert issued to customers on Sunday stipulates a July 14 deadline for submitting claims for incurred losses.

This bankruptcy follows a challenging period for 23andMe, characterized by declining sales, executive resignations, and a significant data breach that impacted the sensitive personal information of nearly 7 million users. The breach, which was publicly disclosed in October 2023, exposed names, birth years, relationship details, DNA sharing percentages with relatives, ancestry reports, and self-reported locations, according to TechCrunch. The incident led to multiple class-action lawsuits and a notable decline in customer trust, severely impacting the company’s consumer business.

Customers affected by the data breach—specifically those informed by 23andMe that their information was compromised between May and October 2023—are eligible to file a Cyber Security Incident Claim. Those who experienced financial or other damages due to the breach can submit a claim as part of the bankruptcy case. Customers with other grievances unrelated to the cyberattack, such as issues with DNA test results or the company’s telehealth services, can submit a separate claim under the General Bar Date Package.

Furthermore, Congress has raised concerns regarding the privacy implications of the bankruptcy.

23andMe’s decline has been attributed to its expansion into digital health and telemedicine, including the $400 million acquisition of Lemonaid Health in 2021. This move, intended to diversify its offerings beyond DNA testing, strained the company’s finances without delivering the anticipated growth.

A proposed $30 million settlement related to the cyberattack class-action lawsuit is currently on hold due to the bankruptcy proceedings. According to 23andMe’s attorneys, the settlement is now in dispute due to the bankruptcy. Customers wishing to preserve their right to compensation must submit a formal proof of claim, regardless of their participation in the class action.

TechCrunch has reached out to 23andMe for further comments on the situation.