23andMe - Audio of May 6 2025 Bankruptcy Court Hearing, case 2025-40976 before the US Bankruptcy Court for the Eastern District of Missouri, #bankruptcy, #privacy, #data, #genetics #sale #truecrime #23andMe

Alright. Let's call our 01:30 matter, please.

Twenty three and Me Holding Co.

Appearances in the courtroom first.

Good afternoon, your honor. Tom Riske, Carnegie McDonald on behalf of the debtors.

Good afternoon. Miranda Swift from Stinson on behalf of the Official Committee of Unsecured Creditors.

Good afternoon to you.

Good afternoon, your Honor. Josh Watson, Bank of JNB. Hello.

Good afternoon, your honor. Carol Ritchik on behalf of the US Trustee.

Good afternoon.

Good afternoon,

your honor. Joshua Jones of United States Of America.

Good day, mister Jones. Anyone else? Alright. Appearances on the Webex, please.

Hi. Good afternoon. Your honor, you've got Eric Wilson of Kelly Drive, Proposed Counsel to

the creditors committee. And, with me online is Megan McLaughlin.

Good afternoon to you both.

Good afternoon. You're in Heather Crockett on behalf of State of Indiana.

Yeah. Anyone else wish to enter an appearance at this time?

Good afternoon. I'm with the National Association of Attorneys General on behalf of the nine client states.

And, miss Ryan?

Good afternoon, your honor. Michael Greger, Mallory Mackensack Campbell, Mallory, and Mattis on behalf of KROC Tech LLC.

The landlord. Okay. Good afternoon.

Good afternoon, Kevin Barnes, Gladstone's shareholder.

Good afternoon, Mr. Barnes.

Good afternoon, Your Honor. Christopher Hopkins Paul Weiss, co counsel to the debtor.

Hopkins?

Good afternoon, Your Honor. Galila Jordan with the Minnesota Attorney General's Office.

Very good. Okay. Any general update before we get into the two matters on the calendar?

I was going to ask the court, if it's acceptable to the court before we get in the agenda, perhaps Mr. Hopkins could give a brief update. And then I'm not sure if the court saw, since it was maybe forty minutes ago, but the U. S. Trustee did file a notice of ombudsman.

So I talked with Ms. Rychak, so she'd like to give a brief update on that as well.

Certainly, certainly. Okay. Let's start with Mr. Hopkins.

Thank you, Your Honor. Good afternoon. And again for the record, Christopher Hopkins of Paul Weiss, Co Counsel to the Debtor. So first of all, thank you to the court for letting us participate remotely today. We thought given today's agenda, we we'd save the estate some money, and participate remotely given Mr.

Bisky is going to be handling the items on today's agenda. So just a few brief updates for the court. So first, as an update on the sale process, as I'm sure Your Honor noticed by the lack of us filing a notice on the docket, but we have not selected a stocking horse bidder at this time and we're planning to move straight into the auction following tomorrow's bid deadline. We continue to have robust interest in the sales process and our expectation is that we're going to receive multiple competitive bids at tomorrow's deadline. Related to that with respect to the dip, given that we determined not to proceed with a stocking horse bid, I'm pleased to report that we were able to work with JMD as our chip lender on the terms of an amendment to the dip to ensure that the debtors maintain access to the second twenty five million dollars tranche of funding available under that facility.

So as your Honor may recall, under the original DIP facility, our ability to access that second twenty five million dollars tranche was there was a milestone requirement that we had obtained approval of a stalking horse bid by May 7 that was either reasonably acceptable to the DIP lender or effectively would generate sufficient proceeds to repay the DIP lender in full from a sale transaction that would close on or before June 30. Under the terms of the amendment, that milestone, so it's being tied to a hard date, has been removed and the condition is now that we obtain access to the $25,000,000 either because we receive a binding bid tomorrow that satisfies those conditions or we announce a successful bidder at the auction that satisfies those conditions. And so with where we landed on the stocking horse and with that STIP amendment, we're obviously well positioned to now move the sale process forward. As Mr. Riske mentioned, we saw that the CPO was appointed today.

We think that's a great development. We've been preparing for the individual to come on scene and we're going to move as quickly as we can to start engaging with Professor Richards to make sure that he's getting the information he needs and the access to the debtors to ensure that he can submit his report on time ahead of the June 17 sales hearing. And finally, Your Honor, one item coming out of last week's hearing that was going to be heard today, this is a bit of housekeeping, was the scheduling issue on the briefing schedule or the class proof of claim issues with the cyber class action claimants and the pixel class action claimants. Those negotiations are proceeding well. I think we have basically landed the plane with Class Counsel and we're in very productive discussions with Pixel Counsel.

And so our proposal on that and I'm not sure if they happen to be on the line today given where we are with them procedurally, but what we would respectfully ask the court for is sometime either Thursday afternoon or on Friday or a quick virtual hearing to just run through, we expect to be able to reach an agreement. And so we would just want to present the proposed schedule to your honor and make sure that the court, is comfortable with how we're planning to proceed.

Sure. I think we can make that happen. Why don't well, tell me if this makes sense as your discussions proceed, as you get a little closer to figure out when would be the best time to do that, then reach out to Mr. Spiedle and we'll get it set up for it sounds like it'd just be an announcement and double checking that we don't have any conflicts with any dates that you have in mind and we can get that done pretty quickly.

Sounds perfect, John. Thank you.

And just Mr. Hawkins, just to be on the record, WebEx hearing or are you talking about a short phone call in chambers to discuss these?

I think if we reach consensus, Your Honor, to save the court's time, hopefully, we could just file a notice of an agreed schedule with respect to each of the respective class counsel. If that works for the court, we'll coordinate with the claimants. And if we do need the assistance of the court to get to a final resolution, we can reach out to Chambers to schedule that quick hearing. Either way, whatever the court prefers.

Okay. So if you've agreed on everything, yes, I agree we don't need to have a phone call or a WebEx hearing. And you can just reach out to Mr. Spital and get that finalized and on file. If we need to sort through some issues, then let's do that.

We'll do that by WebEx hearing. We'll get that scheduled enough time for everybody to join in.

Sound risky for the record. Would you like me to preview that schedule with Your Honor informally before we file it just to make sure it's satisfactory to the court.

If if you're just setting dates for one another to file things, I don't I don't really need to Okay. But for the hearing date Right. It would be important to make sure that I'm available, of course. Oh, yeah. That would be we won't get pretty far with that.

Yes. Okay. But yes, I think that will work. So that sounds like a plan. All right.

Ms. Ryszczyk?

Thank you, Your Honor. As Mr. Ryszczyk mentioned, the U. S. Trustee just filed the notice of appointment of Neil M.

Richards of the Washington University School of Law as the CPO in this case. As you might imagine, given all the publicity in this case, there were many, many individuals, very highly qualified individuals who expressed an interest in serving as CPO in these cases. The US trustees selected several of them to interview last week and ultimately chose Professor Richards. And also by way of update, your honor, the US Trustee did conduct and conclude the 03:41 meeting last Friday. So things are moving along.

Okay. Very good. Thank you very much. All right. Any other updates or should we move to our agenda matters?

We can move to the agenda, Garam. Okay.

So I think you put the rejection motion first For a status conference,

so what's the status? Tom Rizzi for the record, your honor. Had a call with mister Gregor and miss Jones this morning to provide them an update. Unfortunately, this just has not moved as quickly as it should have. We have confirmed what's remaining in this location is not genetic material.

And it was never stored there. And I've confirmed that with the landlord. But there are still despite that we've had two different removals in inspections, there were some chemicals related to an on-site chemist doctor pursuant to research that he would use. So again, in accordance with the inspection issues, we need to again get in there hopefully today, have that removed and then I'm fairly confident that Mr. Greger, Ms.

Jones and I will be able to resolve the issue. We just can't until those facts have been concluded. So if agreeable to the court, if we could just push this another week for another status conference. Are we scheduled next Tuesday? May '20 is two weeks.

I think it's two weeks.

We have two weeks. Yes, we have a hearing scheduled two weeks out. We can if it needs to move faster than that, we can certainly talk about that.

I guess, just if possible, just to so we're not waiting too far into May, if we could just set up for a status next week. Again, my hope is that we'll make that go away and be able able to present a stipulation at that time.

01:30 on there.

Yeah.

I've got a 01:30 conflict next Tuesday, but I could do something in the morning.

We'll make whatever work as long as it works for landlords' counsel.

Right. And they're in California, so not too early in the morning.

Morning.

Yes. Mr. Greger?

I was going to say, your Honor, morning would work for us as well.

Should we think about eleven Central on the thirteenth?

Sure. That works.

That works for you? Okay. So why don't we continue this to 11:00 on the thirteenth? And if you get it resolved, naturally reach out and we'll cancel that. And if you're still where you are right now and need a further extension of time, let's not get 50 people on the WebEx.

Let's just continue it to the next Tuesday without having the hearing and we'll simplify that.

That sounds perfect. Thank you, Your Honor.

Okay. Thank

you. Thank you, Your Honor.

So the foreign representative motion.

Yes, Your Honor. As Your Honor is aware, there's various litigation pending in Canada with respect to the data breach and other things and potential class actions and other litigation. As your Honor knows as well, the debtors have filed an adversary proceeding seeking to enforce or extend the stay with respect to certain of that litigation. We have been in productive discussions with Canadian counsel on how to resolve that kind of similar along the lines of this parallel track of the data breach class claims and things like that. But not to put the cart before horse, before the horse, we do need to have the recognition happen in Canada.

That's something they've asked us to do as well. So all we're seeking today is to have Matt Kavarta as representative of the debtor be appointed as the foreign representative so that they could seek recognition in Canada of this proceeding. We haven't received any objections with respect to that. We have submitted a proposed order. So I'm happy to answer any questions about it, Your Honor.

But that's the limited relief we're seeking with respect to those. Did you

say the Canadian plaintiffs have asked you to have a a case opened in Canada to implement the automatic Well,

they they've raised the issue that we haven't

Oh, they've pointed out the issue. You haven't done it yet. Oh, okay. That's right. That I I get it.

A little different. Right. Right. Okay. Alright.

Anyone wish to be heard on the foreign representative motion? Alright. Very good. It appears to be an order. As you say, there are no objections of record.

No one seems to be objecting here today. So I'll grant the motion, and I'll authorize mister Gvarda to act as foreign representative under section fifteen oh five. I've seen your proposed order. We'll get that turned around and get that entered for you.

Perfect. May I ask, your Honor, I know at previous hearings, your Honor has asked if certain orders require priority. Obviously, we just have one today. One.

Yes. And Your

Honor is always great about entering them promptly.

We'll do that.

But there is a proceeding tomorrow. So I was hoping while I'm working at the courthouse today, I could go down and I've already talked with the clerk's office about obtaining a certified order that we need to take to Canada tomorrow. Sure. Sure. That won't

be a problem. We'll get that taken care of for you.

Thank you so much, your honor. Alright.

Any other request for relief from the debtor or the committee?

Nothing from the committee.

All right. Very well. Thank you, everyone. We'll be adjourned. Thank you,