Companies facing financial difficulties often utilize Chapter 11 to help effectuate a restructuring or sale as part of a case filed in the United States Bankruptcy Court. In other instances, a company’s lender – impatient with a company’s efforts to respond to financial challenges – may apply to a United States District Court for appointment of a federal receiver for the company.
The appointment of a federal receiver is an extraordinary remedy allowed only after a judicial finding that such a step is clearly necessary to protect a lender’s interest in its collateral. Continue Reading
Our previous report on the Chapter 11 case of 23andMe discussed the Sale Order entered by the Bankruptcy Court on June 27, which approved the proposed sale of substantially all of the assets of the company. We noted that given “the numerous objections to the sale process it will be interesting to observe whether any party seeks and obtains a stay.”
Just days after that update, the State of California sought to stay entry of the Sale Order at least as far as made applicable to the residents of California.
The Bankruptcy Court held a hearing on the request on July 7, 2025. At that hearing ... Continue Reading
Last month Restructuring Perspectives highlighted crucial issues at the intersection of privacy and distress presented by the Chapter 11 case of 23andMe. Specifically, “Data for Sale” discussed the recent appointment of a “Consumer Privacy Ombudsman” (CPO) charged with assisting the Court in its consideration of the facts, circumstances, and conditions of the company’s proposed sale of personal consumer data.
The ensuing weeks were full of activity. The CPO filed his report (CPO Report) with the United States Bankruptcy Court on June 11. Then, after authorizing the ... Continue Reading
What happens to sensitive personal information shared by consumers when the company collecting that information encounters financial distress? That exact issue is currently front and center in the Chapter 11 proceedings of 23andMe.
23andMe, of course, pioneered widespread access to human genetic information. Over the past two decades, the company has provided consumers with access to testing kits for insight into personalized genetic traits. Such data is valuable not only to individuals submitting the information but also, on an aggregate basis, to research companies ... Continue Reading