23andMe Alerts Customers About Bankruptcy and Claims Submission: Deadline for Document Filing is July 14

23andMe, previously a frontrunner in the genetic testing industry valued at over a billion dollars, has officially declared Chapter 11 bankruptcy. The company is reaching out to its millions of current and former customers regarding their potential eligibility to submit claims during the restructuring phase. On March 23 of 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 file claims for any losses incurred.

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

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

There are escalating concerns in Congress over the privacy implications tied to the bankruptcy.

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

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

TechCrunch has requested additional comments from 23andMe.