On March 23, 2025, the genetic testing services provider 23andMe filed a Chapter 11 voluntary petition in the US Bankruptcy Court for the Eastern District of Missouri. According to the company’s new Chief Restructuring Officer Matthew Kvarda, lagging business performance and litigation costs stemming from a 2023 data breach that exposed individuals’ personal information contributed to their weakened position.
Nardello & Co. Managing Director & Counsel to the CEO Howard Master spoke with Victoria Hudgins at Lexology to explain that 23andMe’s filing does not stop pending enforcement actions but has complicated regulators’ ability to obtain financial judgments against the company. Howard explains that “[u]nder [section 362 of Chapter 11], a non-US governmental agency should have the power to initiate or continue an enforcement action against a company even after it files for bankruptcy. The only thing it can’t do is enforce a money judgment (including a fine) outside of the bankruptcy proceeding. Thus, negotiation and payment of fines by a bankrupt company is complicated and needs to be resolved along with other claims for payment in the bankruptcy proceeding itself.”
