💥New Chapter 11 BK Filing - 23andMe Holding Co. ($ME)💥
Genetic testing company files for BK after parrying founder's overtures.
On March 23, 2025, 23andMe Holding Co. ($ME) and 11 affiliates (collectively, the “debtors”) gave up the ghost and filed chapter 11 bankruptcy cases in the Eastern District of Missouri (Judge Walsh). When we updated y’all on these now-debtors earlier this month …
… we couldn’t have wrapped more simply:
“As Bloomberg’s Matt Levine recently noted, ‘it will be hard to find another buyer when Wojcicki controls the company,’ so maybe it’s just time for an old-fashioned chapter 11 sale process that’ll put those control rights in their place and other bidders can have an opportunity to drive value in the right direction. Unless the offer gets materially better, that outcome seems inevitable anyway.”
And, hey, that’s exactly what we got for this “leading human genetics and telehealth company” …

… although, truth be told, we didn’t have E.D. Mo. on our bingo card. At least it wasn’t forum shopping, 🤷♀️; these are some long-lived residents of the “Show Me [the Nearest Exit] State.” We dove into the debtors’ business (or lack thereof) back in late February …
… so we’ll be brief here because little has changed. The company derived ~76% (or ~$166.9mm) of its FY24 revenue (~$219.6mm) from Personal Genome Service (“PGS”) offerings – the one-trick pony of hocking a loogie into a test tube, slapping that puppy in the mail, and waiting a few weeks for the debtors to serve up a breakdown of your ancestry. In a nutshell, that’s the problem with the entire business; there’s no recurring demand, and competition from others, along with first-day faves COVID, inflation, and increased costs, only made matters worse. Most of the rest of that revenue ⬆️ comes from the debtors’ plain vanilla telehealth platform Lemonaid, coming in at a sweet ~16% (~$35.1mm), with the ~8% balance (~$17.6mm) deriving from research services, largely through a now-done-and-dusted deal with a GlaxoSmithKline ($GSK) affiliate.*
So what’s new since our prior updates? For one, in a none-too-surprising move, employee count is down yet again, to ~286 as of the petition date, a ~20% fall from November ‘24’s already-decimated headcount of ~359.** For another, on March 21, 2025, the debtors executed settlement agreements addressing various litigation claims stemming from their cyber-security breach for $37.5mm all-in. Just in time for bankruptcy too: the debtors executed the definitive docs on March 21, 2025, three days before the petition date.
On governance, the debtors appointed Thomas Walper, formerly of Munger Tolles & Olson LLP, to their board and special committee, where he rounds out the latter’s membership at four, alongside November ‘24 appointees Mark Jensen, Andre Fernandez, and Jim Frankola, and will undoubtedly provide substantial insight into the committee’s “special review” of claims against directors, officers, equity holders, and “other” company insiders.
And we already said this is a sale case, so turning to that, there’s, lol, no stalking horse. Even though the debtors began soliciting third-party interest back in January ‘25, engaging with 103 potential counterparties and executing 42 NDAs, and only received a single offer – from then-CEO and still-board-member Anne Wojcicki – that provided for an out-of-court solution, they couldn’t line one up. Oh, why “then-CEO”? Because on the petition date, Ms. Wojcicki clocked out from the company’s employ to focus on buying it back.

Her enthusiasm was not shared, lol:

Anyway, CFO Joseph Selsavage replaced Ms. Wojcicki as interim CEO and President, while Alvarez & Marsal North America, LLC’s Matthew Kvarda is serving as CRO.
While we wait to see what Ms. Wojcickis’ next bid looks like, we can’t help but notice her prior offer of 41¢ per share and contingent value rights of up to $2.53 is looking more appealing by the minute. Or not. Really, depends on when you check. After the filing caused the price to plummet from $1.79 per share down to 52¢, it’s since bounced all over the place, hitting a high of $1.20 before slinking back to 61¢ (and beyond after hours).
With respect to the timeline to get to that sale, here’s what the debtors have in mind.

In and out, and in case any of our dear readers’ genetic data is held by the debtors, you’re probably (no promises) going to be okay because “the proposed bidding procedures will require any person or entity who wishes to participate in the Auction to comply, in all respects, with the Debtors’ existing consumer privacy practices and will require an affirmative statement as part of any bid acknowledgment of such compliance.”*** Although that has stopped absolutely no one from sounding the alarms. Here’s US senator Ron Wyden (D-OR), NY Attorney General Letitia James, AZ Attorney General Kris Mayes, security researcher and software engineer Jane Manchun Wong, journalist Jason Koebler, MrsDowJones and the soon-to-be-federally-deleted NPR (what, too soon?):






There are many, many more, but you get the picture.
But either debtors’ counsel Paul, Weiss, Rifkind, Wharton & Garrison LLP (“Paul Weiss”)(Paul Basta, Christopher Hopkins, Jessica Choi, Grace Hotz, Justin Simms, Lauren Castillo, William Clareman) and Carmody MacDonald P.C. (Thomas Riske, Nathan Wallace, Jackson Gilkey, Robert Eggmann III) did a good job assuaging concerns at the first day hearing – by pointing government lawyers to publicly-available, free-of-charge, court-filed documents**** – or because there’s already something new and doubtlessly more entertaining on TikTok for the kids to be up in arms about, interest in deleting accounts and data … which was initially so robust that the debtors’ website crashed … is already falling.

In terms of the prepetition cap stack, it couldn’t be much simpler. The debtors filed with no funded debt and $37mm of unrestricted cash on hand,***** which basically requires us to ask what exactly Mr. Kvarda is doing in his officer role because, as far as we can tell, there’s jack sh*t to restructure.
Regardless, having cash and no debt isn't going to stop the debtors from seeking a DIP. Unsurprisingly, Ms. Wojcicki tossed in an undisclosed proposal for that too, but the special committee opted for JMB Capital Partners Lending, LLC’s (“JMB”) term sheet, which provides for a $35mm senior secured term loan.****** But because the debtors aren’t pulling up to St. Louis on fumes (not yet anyway — almost half of the debtors’ cash on hand will be burned on pro fees between the petition date and June 6), they’re not seeking immediate funding. Instead, court approval to flip the term sheet into definitive documentation sufficed. Approval of the term sheet paid out a $100k work fee and $700k commitment fee, equal to 2% of the total commitments, to JMB, while the second-day hearing will bring the definitive docs and, if approved, an immediate injection of $10mm, with the remaining $25mm locked up until the court approves a stalking horse agreement that either pays JMB off in full or has its support. Why that condition? Because Ms. Wojcicki’s 41¢ offer would have paid $12.1mm in current cash, and JMB definitively doesn’t want to get left holding the bag. The DIP will carry a 14% cash-pay interest rate and, in addition to those other fees, a 4% exit fee is doled out at each stage of funding, which should provide a nice return under a budget that forecasts getting (barely) through the sale with cash on hand and, therefore, zero DIP draws.
The debtors’ first-day hearing went forward on March 26, 2025, at which the court granted all requested relief and scheduled a second-day hearing on April 22, 2025. Despite stretching nearly 3.5 hours, the hearing went about as smoothly as it could under the circumstances, with most drawn-out discussion coming from those government lawyers noted above, as well as plaintiffs’ lawyers who didn’t like the debtors’ attempt to make them sub-agents of Kroll by forcing them to forward, through court order, documents to their clients. That got hashed out by removing the language in toto, but can’t blame ‘em for trying.
No doubt an unsecured creditors’ committee will force itself into the conversation before long, and we hear rumblings that an equity committee isn’t out of the question. Given the capital structure, it wouldn’t be at all surprising. And perhaps Brown Rudnick LLP will land one of those roles. We hear they were in attendance at the hearing and are undoubtedly looking forward to providing their well-known “constructive” input on process.
The debtors are represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP (Paul Basta, Christopher Hopkins, Jessica Choi, Grace Hotz, Justin Simms, Lauren Castillo, William Clareman) and Carmody MacDonald P.C. (Thomas Riske, Nathan Wallace, Jackson Gilkey, Robert Eggmann III) as legal counsel, Alvarez & Marsal North America, LLC (Matthew Kvarda) as CRO and financial advisor, and Moelis & Company LLC ($MC) (Barak Klein, Andrew Swift) as investment banker. Mark Jensen, Andre Fernandez, Jim Frankola, and Thomas Walper are independent directors, compose the debtors’ special committee, and are represented by Goodwin Procter LLP (Robert Lemons, Debora Hoehne, Katherine Lynn) and Lewis Rice LLC (Larry Parres) as legal counsel. JMB is represented by Norton Rose Fulbright US LLP (Rob Hirsch, Jamie Copeland, Kristian Gluck, Jeff Kalinowski, Joshua Watts). TTAM 2.0, LLC is represented by Skadden, Arps, Slate, Meagher & Flom LLP (Evan Hill, Ron Meisler, Joe Larkin, Jason Kestecher) and Armstrong Teasdale LLP (Erin Edelman, David Going) as legal counsel.
* GSK also owns a decent slice of the equity, with 7.23%.
** At its peak, the company had 816 employees.
***This👇:

**** You have to wonder what these public servants were doing during their 3 years of law school and post-grad practice. None of them took the time to review anything the debtors put on the docket ahead of the hearing.
***** Otherwise the capital structure is simple AF. The debtors’ unsecured claims relate to ordinary course trade and cyber-security claims.
****** You may recall JMB is the firm that provided the first-day, non-consensual priming DIP in Prospect Health, although this one ought to go a touch easier.
Company Professionals:
Legal: Paul, Weiss, Rifkind, Wharton & Garrison LLP (Paul Basta, Christopher Hopkins, Jessica Choi, Grace Hotz, Justin Simms, Lauren Castillo, William Clareman) and Carmody MacDonald P.C. (Thomas Riske, Nathan Wallace, Jackson Gilkey, Robert Eggmann III)
Independent Directors: Mark Jensen, Andre Fernandez, Jim Frankola, and Thomas Walper
Legal: Goodwin Procter LLP (Robert Lemons, Debora Hoehne, Katherine Lynn) and Lewis Rice LLC (Larry Parres)
Financial Advisor/CRO: Alvarez & Marsal North America, LLC (Matthew Kvarda)
Investment Banker: Moelis & Company LLC (Barak Klein, Andrew Swift)
Claims Agent: Kroll (Click here for free docket access)
Other Parties in Interest:
DIP Lender: JMB Capital Partners Lending, LLC
Legal: Norton Rose Fulbright US LLP (Rob Hirsch, Jamie Copeland, Kristian Gluck, Jeff Kalinowski, Joshua Watts)
TTAM 2.0, LLC
Legal: Skadden, Arps, Slate, Meagher & Flom LLP (Evan Hill, Ron Meisler, Joe Larkin, Jason Kestecher) and Armstrong Teasdale LLP (Erin Edelman, David Going)