NEW YORK – Genetic testing and ancestry company 23andMe said Sunday that it has initiated Chapter 11 bankruptcy proceedings in the US Bankruptcy Court for the Eastern District of Missouri in order to "facilitate a sales process to maximize the value of its business."
CEO Anne Wojcicki said in a post on X that she was disappointed that the company had rejected her past offers to take the company private and that she was resigning in order to now bid on purchasing it.
"I have resigned as CEO of the company so I can be in the best position to pursue the company as an independent bidder," she said in her post.
The Sunnyvale, California-based company said in a statement that it will continue to operate throughout the sale process, with no changes to the way it stores, manages, or protects data.
California Attorney General Rob Bonta issued a consumer alert to remind 23andMe's customers of their right under the Genetic Information Privacy Act to have their data deleted.
"California has robust privacy laws that allow consumers to take control and request that a company delete their genetic data," Bonta said in a statement.
The company is seeking authorization from the court to sell the majority of its assets. If approved, an independent investment banker would assist 23andMe in soliciting qualified bids over a 45-day process. In the case of multiple qualified bids, the firm said that it would hold an auction "to maximize the value of its assets."
The company requested permission from the court to continue paying its employees' wages and benefits and to compensate certain vendors and suppliers going forward. It is also seeking approval to reject "numerous" contracts, including its real estate leases in Sunnyvale and San Francisco, to reduce operating expenses.
The firm also received a commitment for debtor-in-possession financing of up to $35 million from JMB Capital Partners. If approved, liquidity from this financing combined with cash from ongoing operations will help support the company throughout the bankruptcy and sale process.
23andMe noted liquidity concerns in its fiscal third quarter earnings call at the end of January, stating that it was seeking to raise cash to fund operations and financial commitments. It continues to pursue a settlement that covers all US customers affected by last year's data breach, in which hackers gained access to personal information in nearly 7 million profiles.