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 the Court ruled that the State had failed to show that irreparable injury to California residents would occur if a stay did not enter. California then appealed to the United States District Court, which issued a temporary stay of three days to allow further consideration of the request. On July 10, 2025, the District Court refused to extend the stay – allowing just one additional day to enable the State to seek a further appeal to the United States Court of Appeals for the Eighth Circuit.
The Eighth Circuit then put the question of a stay to bed when it denied the State’s emergency motion seeking to extend. The Eighth Circuit’s decision -- and the lapse of the temporary stay put in place by the District Court – meant that no impediment existed to the closing of the sale transaction approved by the Bankruptcy Court. As a result, 23andMe closed on the court approved transaction. TTAM Research Institute, formed by 23andMe’s co-founder and former CEO Anne Wojcicki, is now the new owner of substantially all of 23andMe’s assets.
Although the bankruptcy sale process has now concluded, the issues raised in the 23andMe saga will continue to play out on the legislative front. As mentioned in our last article, the bipartisan “Don’t Sell My DNA Act” introduced in May by Senators Chuck Grassley (R-Iowa), John Cornyn (R-Texas) and Amy Klobuchar (D-Minn.) remains pending. That bill now has a House companion (H.R. 4492, 119th Cong.), which was introduced on July 17, 2025 by Reps. Ben Cline (D., Va.) and Zoe Lofgren (D., Calif.). The legislation seeks to amend the Bankruptcy Code’s definition of “personally identifiable information” to include genetic information and to require written notice and affirmative consumer consent as a condition to any attempted sale in bankruptcy proceedings.
