Genetic testing firm 23andMe files for Chapter 11 bankruptcy

BY Richard Summerfield

DNA testing firm 23andMe has filed for Chapter 11 to help sell itself. Anne Wojcicki, 23andMe’s co-founder who has been attempting to take the company private, has stepped down from her role with the intent to become an outside bidder for the asset sale.

23andMe filed for bankruptcy protection in the US Bankruptcy Court for the Eastern District of Missouri to “facilitate a sale process to maximise the value of its business”. The company plans to sell its assets through a Chapter 11 plan which, if approved by the court, will see 23andMe “actively solicit qualified bids” over a 45-day process.

The company has between $100m and $500m in estimated assets, as well as between $100m and $500m in estimated liabilities, according to the bankruptcy filing. To support the business in the months ahead, private equity (PE) firm JMB Capital Partners has committed up to $35m of debtor-in-possession financing.

Ms Wojcicki will remain a member of the board. Joseph Selsavage, 23andMe’s chief financial and accounting officer, will serve as interim chief executive, according to a filing with the US Securities and Exchange Commission.

“After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale process is the best path forward to maximize the value of the business,” said Mark Jensen, chair and member of the special committee of the board. “We expect the court-supervised process will advance our efforts to address the operational and financial challenges we face, including further cost reductions and the resolution of legal and leasehold liabilities. We believe in the value of our people and our assets and hope that this process allows our mission of helping people access, understand and benefit from the human genome to live on for the benefit of customers and patients.

“We want to thank our employees for their dedication to 23andMe’s mission. We are committed to supporting them as we move through the process. In addition, we are committed to continuing to safeguard customer data and being transparent about the management of user data going forward, and data privacy will be an important consideration in any potential transaction,” he added.

23andMe has endured a difficult few years both financially and reputationally. The company was subject to an enormous data breach in 2023 that affected the data of nearly 7 million people, about half of its customers. Since that breach, revenues have fallen as many of its customers scrambled to delete their DNA data from the company’s archives. Amid falling share prices and a dwindling customer base, the company reduced its workforce by around 200 people – roughly 40 percent of its staff – and stopped development of all its therapies in November. The company also agreed to pay $30m and undergo three years of security monitoring to settle a lawsuit accusing it of failing to protect the privacy of those customers whose personal information was exposed in the data breach.

Since April 2024 Ms Wojcicki had pushed to buy out 23andMe, but her efforts were rebuffed by the board. Most recently, Ms Wojcicki and her PE partner New Mountain offered to acquire all of 23andMe’s outstanding shares for $2.53 per share, or an equity value of approximately $74.7m in February 2025, however that offer was rejected. Earlier this month she offered $0.41 per share, an 84 percent cut from an offer the previous month since her PE partner in that bid had walked following the board’s rejection.

News: DNA testing firm 23andMe files for bankruptcy as demand dries up

Better positioned: Spirit Airlines emerges from Chapter 11

BY Fraser Tennant

With significantly less debt and greater financial flexibility, US carrier Spirit Airlines has emerged from Chapter 11 bankruptcy having completed its financial restructuring – a stronger company better positioned for long-term success.

As part of the restructuring, Spirit received a $350m equity investment from existing investors to support the company’s future initiatives, including investments to provide its customers with enhanced travel experiences and greater value.

The Florida-based airline filed for bankruptcy protection in November 2024, after years of losses, failed merger attempts and heavy debt levels. Reporting a net loss of $1.2bn in 2024, Spirit Airlines was the first major US carrier to file for Chapter 11 since 2011. 

“We are pleased to complete our streamlined restructuring and emerge in a stronger financial position to continue our transformation and investments,” said Ted Christie, president and chief executive of Spirit Airlines. “Throughout this process, we have continued to make meaningful progress enhancing our product offerings, while also focusing on returning to profitability and positioning our airline for long-term success.”

As part of its turnaround strategy, the company has said it would shift its focus away from price-conscious customers to more affluent travellers, in a move it estimates would generate 13 percent more revenue per passenger. In a further bid to attract customers, the airline plans to redesign its loyalty programme and enter into alliances with other carriers.

Following emergence from Chapter 11, Spirit will continue to be led by Mr Christie and its existing executive team. In addition, the company also emerges with a reconstituted board of directors.

A leading low-fare carrier committed to delivering an enhanced travel experience with flexible, affordable options, Spirit serves destinations throughout the US, Latin America and the Caribbean. It is one of the youngest and most fuel-efficient fleets in the US.

“Despite the challenges we have faced as an organisation, we are emerging as a stronger and more focused airline,” concluded Mr Christie. “On behalf of the executive team, I would also like to thank our outgoing board members for their contributions and invaluable service to our airline."

News: Spirit Airlines targets more affluent travelers after emerging from bankruptcy

Battery maker Northvolt files for Chapter 11

BY Fraser Tennant

Despite exhaustive efforts to secure a viable financial and operational future, Swedish battery maker Northvolt has filed for Chapter 11 bankruptcy in Sweden.

The company, like many in the battery sector, has experienced a series of challenges in recent months that eroded its financial position, including rising capital costs, geopolitical instability, subsequent supply chain disruptions and shifts in market demand.

Northvolt has also faced significant internal challenges in its ramp-up of production, both in ways that were expected by engagement in what is a highly complex industry, and others which were unforeseen.

The company sought Chapter 11 bankruptcy protection in the US in November 2024, but despite liquidity support from its lenders and key counterparties, it was unable to secure the necessary financial conditions to continue in its current form.

As a result, the board of directors at Northvolt determined that Chapter 11 bankruptcy in Sweden was the only available solution while the company pursues all realistic options to obtain financing to continue operating during the Swedish bankruptcy process.

“This is a difficult time for everyone at Northvolt,” said Tom Johnstone, interim chairman of the board at Northvolt. “We set out to build something groundbreaking – to drive real change in the battery, electric vehicle and wider European industry and accelerate the transition to a green and sustainable future.”

This future includes the improvement and upwards trajectory of Northvolt's production in Skellefteå, where cell output from serial production lines has doubled and the company has secured a 50 percent improvement in production yield since September 2024.   

“Northvolt has come a long way, and we are beginning to see the real outcomes of our work, including production line improvements that helped customers bring more electric vehicles to the market more quickly,” continued Mr Johnstone. “It remains key for Europe to have a homegrown battery industry, but it is a marathon to build such an industry. It needs patience and long-term commitment from all stakeholders.”

The company is hopeful that the outreach it has undertaken with potential investors during the Chapter 11 process will accelerate identifying the necessary financing to allow continued trading under the Swedish bankruptcy process.

Mr Johnstone concluded: “We are hopeful that the foundation we built – the technology, the expertise and the commitment to sustainability – will continue to drive change in the industry.”

News: Swedish battery maker Northvolt files for bankruptcy

Liberated Brands files for Chapter 11 protection

BY Richard Summerfield

Liberated Brands, the former operator of licences for Quiksilver, Volcom and Billabong, has filed for Chapter 11 bankruptcy protection in a Delaware court. According to the company’s filing, it intends to wind down its North American operations.

Set up to manage Authentic Brands Group’s collection of action sports lifestyle brands, Liberated was founded by ex-Volcom executives in 2019. It underwent a massive expansion after the COVID-19 retail boom, going from operating 67 stores to 140 in short order. The expansion also saw the company nearly triple its staff and take over the retail and e-commerce operations for Billabong, Quiksilver, RVCA and more. However, it struggled since this expansion, and in December 2024, Authentic decided to pull all the licences from Liberated globally, believing it did not have the resources to adequately invest in them.

According to Liberated’s Chapter 11 filing, its estimated assets and liabilities ranged from $100m to $500m. The company has $3.3m in cash on hand and $226m in debt. The list of Liberated’s largest unsecured creditors included a range of overseas clothing manufacturers. Liberated owes its single biggest unsecured creditor, Ningbo Jehson Textiles in China, $3.2m. Additional large unsecured creditors include other companies that license former Boardriders brands, including the 05 Group, which Liberated owes about $1m, and Centric Brands, which has the licence to make children’s apparel for several former Boardriders brands. Liberated owes Centric approximately $750,000.

Liberated has received interim approval to access $25m of its $35m debtor-in-possession financing from its secured lender JPMorgan Chase Bank NA. The move is seen as interim measure to get the company to its next hearing on 4 March 2025.

“The Liberated team has worked tirelessly over the last year to propel these iconic brands forward, but a volatile global economy, consumer spending changes amid a rising cost of living, and inflationary pressures have all taken a heavy toll,” said Liberated Brands in a statement. “Despite this difficult change, we are encouraged that many of our talented associates have found new opportunities with other license holders that will carry these great brands into the future.”

The brands which Liberated licensed from Authentic will not be impacted by the Chapter 11 filing. According to a statement, the brands have already transitioned to new, well-capitalised partners. The company currently has more than 100 locations in the US, all of which will close once a liquidation sale process has been completed. The fate of the company’s nine stores in Hawaii has not yet been determined. The company said it is looking for a buyer of its Australian, European, Japanese and Canadian business units, which are also unaffected by the filing.

News: Liberated Brands Files for Chapter 11 Bankruptcy

The Container Store exits Chapter 11

BY Fraser Tennant

Weeks after filing for Chapter 11 bankruptcy protection, US speciality retail chain The Container Store Group has successfully completed its financial restructuring process and emerged as a private company.

The company achieved the objectives it set for the bankruptcy and restructuring processes, including refinancing short-term debt, significantly reducing previous long-term debt obligations, accessing $40m in new financing, and modifying its asset-backed lending facility to add $40m in upsized capacity.

In addition, the company has continued to operate as usual, meeting its obligations to vendors, employees and customers throughout the bankruptcy process, and is now under the ownership of its supportive lenders, with a healthier balance sheet that positions the company for profitable growth.

The Texas-based company filed for Chapter 11 bankruptcy in December 2024 citing mounting debt and quarterly losses. According to court documents, the company was $243m in debt while having approximately $11.8m cash in hand.

The Container Store is among a number of retailers that have fallen into bankruptcy, including Party City and Joann, which filed its second bankruptcy earlier this week. Big Lots has also announced plans to close entirely.

“This is a new chapter in our journey as a healthier company well positioned to drive strategic growth initiatives forward,” said Satish Malhotra, chief executive and president of The Container Store. “With our restructuring process now behind us, we have renewed energy and excitement to deliver for our customers.

Founded in 1978, The Container Store is the only retailer in the US with a solution-oriented offering of custom spaces, organising solutions, and in-home services, designed to transform lives through the power of organisation.

With more than 100 locations nationwide and a flagship online store, the retailer offers an exclusive portfolio of custom space lines that can be designed for any area of the home, and more than 10,000 products to complete any space.

“We are focused on optimising our business, enhancing our portfolio of organising solutions and services, and continuously improving the customer experience,” concluded Mr Malhotra. “I am grateful to our employees and vendor partners for their dedication throughout this process, to our valued customers for their support, and to our new owners for their belief in our business.”

News: The Container Store emerges from Chapter 11 bankruptcy