23andMe Alerts Customers About Bankruptcy and Claims Process: Filing Deadline Set for July 14

23andMe, once a prominent player in the genetic testing industry valued at over a billion dollars, has officially entered Chapter 11 bankruptcy. The company is reaching out to its millions of current and former customers regarding potential eligibility to submit claims during its restructuring phase. On March 23 this year, 23andMe, along with 11 subsidiaries, including Lemonaid Health and LPRXOne, sought bankruptcy protection in the Eastern District of Missouri. Customers were notified on Sunday that they have until July 14 to submit claims for any losses incurred.

This bankruptcy comes after a challenging 18-month stretch for 23andMe, marked by decreasing sales, the exit of key executives, and a significant data breach affecting sensitive information of nearly 7 million users. The breach, disclosed in October 2023, compromised personal details such as names, birth years, relationship statuses, DNA sharing rates, ancestry information, and self-reported locations, as reported by TechCrunch. This incident led to multiple class action lawsuits and severely undermined customer trust, greatly impacting the company’s operations.

Customers who were affected—especially those notified by 23andMe regarding their data breach from May to October 2023—can file a Cyber Security Incident Claim. Individuals experiencing financial or other damages due to the breach may submit claims as part of the bankruptcy process. Customers with other concerns, such as issues regarding DNA test results or the company’s telehealth services, can file distinct claims under the General Bar Date Package.

There are rising concerns in Congress about the privacy implications surrounding the bankruptcy.

The swift decline of 23andMe has been worsened by its ambitious yet costly ventures into digital health and telemedicine, particularly the $400 million acquisition of Lemonaid Health in 2021. Although this strategy aimed to expand 23andMe’s offerings beyond consumer DNA testing, it ultimately strained financial resources without yielding the anticipated growth.

A proposed $30 million settlement concerning a class action lawsuit related to the cyberattack is currently on hold due to the bankruptcy proceedings. Legal representatives for 23andMe have indicated that the settlement is now disputed in light of the bankruptcy. Customers wishing to maintain their right to compensation must submit a formal proof of claim, regardless of their involvement in the class action.

TechCrunch has reached out for additional comments from 23andMe.