8-K: Chrome Holding Co. Files Amended Bankruptcy Plan

Chrome Holding Co. has filed its Third Amended Joint Plan under Chapter 11, outlining asset sales and settlement agreements for data breach claims, with a confirmation hearing set for November 19, 2025.

Summary

• Chrome Holding Co. (f/k/a 23ANDME HOLDING CO.) and certain subsidiaries filed a Third Amended Joint Plan under Chapter 11 bankruptcy on November 14, 2025.
• The plan includes a modified settlement agreement with the U.S. Data Breach Arbitration Settlement Parties and removes the Equity Sale Transaction toggle structure.
• A confirmation hearing for the Plan is currently scheduled for November 19, 2025, at 1:30 p.m. Central Time.
• The plan outlines the sale of substantially all of the Debtors' assets to 23andMe Research Institute (Chrome Purchaser) for $302.5 million (Chrome Sale Transaction).
• It also includes the sale of all Lemonaid Interests to Lemonaid SPV, Inc. (Lemonaid Sale Transaction), with the purchase price set forth in the Lemonaid Purchase Agreement.
• The plan establishes a Plan Administration Trust to manage assets, reconcile claims, and distribute proceeds according to a 'Waterfall Recovery' priority scheme.
• Settlement agreements are in place for various data breach claims:
• U.S. Data Breach Arbitration Claims: An agreement has been reached on terms to resolve approximately 32,000 claims, with the settlement amount not specified in the filing.
• U.S. Data Breach Class Settlement Claims: Preliminarily approved, with an allowed amount no less than $30 million and capped at $50 million.
• Canadian Data Breach Class Settlement Claims: Preliminarily approved, with an allowed amount of $3.25 million.
• Pixel Class Settlement Claims: Preliminarily approved, with an allowed amount of $3.25 million.
• The company cautions that trading in its Class A common stock is highly speculative and poses substantial risks, with prices potentially bearing little or no relationship to actual recovery for shareholders.

Sentiment

Score: 2

Explanation: The company is in Chapter 11 bankruptcy, undergoing liquidation through asset sales, and explicitly warns that common stock is highly speculative with little to no expected recovery for shareholders. While settlements provide some clarity on liabilities, the overall situation is dire for equity investors.

Positives

• The filing of a Third Amended Joint Plan indicates progress towards an exit from Chapter 11 bankruptcy.
• Settlement agreements for U.S. Data Breach Arbitration Claims (~32,000 claims), U.S. Data Breach Class Settlement Claims (no less than $30 million, capped at $50 million), Canadian Data Breach Class Settlement Claims ($3.25 million), and Pixel Class Settlement Claims ($3.25 million) provide clarity on significant liabilities.
• The Chrome Sale Transaction for $302.5 million provides substantial proceeds for distributions to creditors.
• The establishment of a Plan Administration Trust aims for an orderly wind-down and distribution process.
• Indemnification provisions for current and former directors, officers, managers, employees, attorneys, accountants, investment bankers, and other Professionals (excluding Excluded Parties) are reinstated.
• D&O Liability Insurance Policies are assumed, providing continued coverage for past conduct.

Negatives

• The company is undergoing Chapter 11 bankruptcy proceedings, indicating severe financial distress and an inability to meet obligations in the ordinary course of business.
• Trading in the company's common stock is highly speculative, and prices may bear little or no relationship to actual recovery for holders, implying potential significant loss for equity holders.
• The Former CEO, Anne Wojcicki, and certain other former directors/officers/CSO are explicitly excluded from releases and indemnification, suggesting potential ongoing liabilities or disputes.
• The plan involves the dissolution of the Debtors, signifying the cessation of the current business operations.
• Holders of Claims whose aggregate distributions total less than $100 will not receive a distribution, except for certain data breach classes.

Risks

• There is no assurance that the Court will approve the Plan or that the Debtors will successfully consummate the transactions set forth in the Plan or any similar transaction.
• Risks and uncertainties relate to the Chapter 11 Cases, including obtaining Court approval for motions, the effects on the Company and its constituents, Court rulings (including Plan confirmation and the Effective Date), and the overall outcome of the cases.
• The length of time the Company will operate under Chapter 11 is uncertain.
• Risks are associated with any third-party motions in the Chapter 11 Cases.
• The Chapter 11 Cases may have adverse effects on the Company's liquidity or results of operations and lead to increased legal and other professional costs.
• The trading price and volatility of the Common Stock are significant risks.
• There is a risk regarding the continuation of trading of the Common Stock on the OTC Pink Market, including whether broker-dealers will continue to provide public quotes and whether trading volume will be sufficient for an efficient market.
• The IRS could potentially challenge the classification of the Plan Administration Trust as a liquidating trust, which could result in adverse federal income tax consequences, including entity-level tax.

Future Outlook

The Debtors intend to pursue the objectives and terms set forth in the Plan, but there is no assurance that the Court will approve the Plan or that the transactions will be consummated. The company's common stock trading is highly speculative, and its price may not reflect actual recovery for shareholders. The company does not undertake any obligation to update forward-looking statements.

Management Comments

• "Although the Debtors intend to pursue the objectives and the terms set forth in the Plan, there can be no assurance that the Court will approve the Plan or that the Debtors will be successful in consummating the transactions set forth in the Plan or any similar transaction, on different terms or at all."
• "The Company cautions that trading in the Company’s Class A common stock, $0.0001 par value per share (the Common Stock) during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks. Trading prices for the Company’s Common Stock may bear little or no relationship to the actual recovery, if any, by holders of the Common Stock in the Chapter 11 Cases."

Industry Context

The filing reflects a company undergoing a significant restructuring and liquidation process, driven by substantial liabilities from a 2023 cyber security incident and other claims. The asset sales (Chrome and Lemonaid) are typical for companies in Chapter 11 seeking to maximize value for creditors. The multiple class action and arbitration settlements highlight the increasing financial impact of data breaches on companies, particularly in sectors handling sensitive personal information.

Comparison to Industry Standards

• The $302.5 million sale of 'substantially all' assets to 23andMe Research Institute (the Chrome Purchaser) suggests a strategic divestiture to a related entity, which can sometimes be scrutinized for fair value compared to open market sales.
• The multiple data breach settlements (U.S. Class, Canadian Class, U.S. Arbitration, Pixel Class) totaling at least $36.5 million (and up to $56.5 million for U.S. Class) indicate a significant financial burden from the 2023 cyber security incident, comparable to other large-scale data breach settlements seen in the tech and healthcare industries. For example, Equifax settled for up to $425 million for its 2017 data breach, and Anthem settled for $115 million for its 2015 breach. While the specific context and scale differ, the multi-jurisdictional class action and arbitration approach is standard for such incidents.
• The explicit warning about the speculative nature of common stock trading and its potential disconnect from actual recovery is a standard disclosure in bankruptcy proceedings, aligning with the typical outcome for equity holders in Chapter 11 liquidations where creditor claims often exhaust available assets.

Management Changes

Corporate Governance

Legal Proceedings

• Voluntary petitions seeking relief under Chapter 11 of Title 11 of the United States Bankruptcy Code were filed on March 23, 2025.
• U.S. Data Breach Arbitration Claims: An agreement has been reached to resolve approximately 32,000 claims.
• U.S. Data Breach Class Settlement: A preliminarily approved class settlement for U.S. persons impacted by the 2023 Cyber Security Incident.
• Canadian Data Breach Class Actions: Two class actions (J.R. v. 23andMe Holding Co. et al., BCSC court file no. S-237147; J.R. and M.M. v. 23andMe Holding Co. et al., BCSC court file no. S-246520) are subject to a preliminarily approved settlement.
• Pixel Class Action: An action titled A.J., et al. v. Lemonaid Health Inc. and LMND Medical Group, Inc. d/b/a/ Lemonaid Health, No. 3:23-cv-03288, is subject to a preliminarily approved settlement.
• The Bankruptcy Court will retain jurisdiction over all matters arising out of or related to the Chapter 11 Cases, including claims allowance, professional fees, executory contracts, and enforcement of the Plan.

Related Party Transactions

• The Chrome Sale Transaction involves the sale of substantially all of the Debtors' assets to 23andMe Research Institute f/k/a TTAM Research Institute, which shares a name with the former name of Chrome Holding Co. (23ANDME HOLDING CO.), indicating a related-party transaction.
• The 'Chrome Purchaser Released Parties' include ABeeC 2.0, LLC and the Anne Wojcicki Foundation. Anne Wojcicki is identified as the 'Former CEO' and an 'Excluded Party' from general releases, but her foundation is a released party in the context of the Chrome Purchaser, highlighting complex related-party dynamics.

Stakeholder Impact

• Shareholders (HoldCo Interests): Face highly speculative recovery, with trading prices potentially bearing little or no relationship to actual recovery. Distributions are last in the Waterfall Recovery, only if all other claims are paid in full.
• Creditors (General Unsecured Claims): Will receive distributions from the Plan Administration Trust, with specific settlement amounts for data breach and Pixel claims. Commercial creditors may receive post-petition interest if sufficient funds are available.
• Data Breach Claimants: Specific settlement funds are established for U.S. Class, Canadian Class, U.S. Arbitration, and Pixel Class claimants, providing a structured path to recovery.
• Employees: Claims arising from employment with Chrome Debtors or Lemonaid Debtors (not entitled to priority) are classified as commercial claims. Indemnification provisions for current and former directors, officers, managers, and employees are reinstated (with exceptions).
• Customers: Those affected by the 2023 Cyber Security Incident and Pixel Class Action are addressed through specific settlement classes.
• Management/Directors: Current and former directors/officers (excluding specific 'Excluded Parties') benefit from reinstated indemnification and D&O insurance.

Next Steps

• A Confirmation Hearing for the Plan is scheduled for November 19, 2025.
• Establishment and funding of various reserve accounts (Administrative / Priority Claims, Data Breach and Pixel Settlement, Cyber Insurance, Disputed Claims) on or after the Effective Date.
• Consummation of the Lemonaid Sale Transaction on the Effective Date.
• Transfer of Plan Administration Trust Assets to the Plan Administration Trust on the Effective Date.
• Appointment of the Plan Administrator and Representatives on the Effective Date.
• Payment of Allowed Administrative Claims, Professional Fee Claims, and Priority Tax Claims.
• Administration, liquidation, and discharge of claims and interests by the Plan Administrator.
• Prosecution of Retained Causes of Action by the Plan Administration Trust.
• Dissolution of the Debtors and their boards of directors/managers after the Effective Date.
• Filing of final tax returns and request for expedited tax determination.
• Closing of Chapter 11 Cases after full administration.

Key Dates

Recommendation

The company is in Chapter 11 bankruptcy, undergoing a liquidation process through asset sales. The explicit warning that common stock trading is 'highly speculative' and may bear 'little or no relationship to the actual recovery, if any, by holders of the Common Stock' indicates a near-certain loss for equity holders. The dissolution of the Debtors further confirms the cessation of the existing business. While the plan aims for an orderly wind-down, the value for equity is expected to be minimal to non-existent after satisfying higher-priority claims.

Keywords

Chrome Holding Co., 23andMe Holding Co., Chapter 11, Bankruptcy, Restructuring, Data Breach Settlement, Asset Sale, Lemonaid Sale, Plan Administration Trust, Corporate Governance, Financial Distress, Common Stock, Liquidation, SEC Filing