A court fight broke out last week over 23andMe’s bankruptcy sale of genetic and other personal data collected from over 15 million people. The Texas AG and U.S. Trustee moved the court to appoint a neutral privacy ombudsman before the company can sell data. The AG cited the company’s admission that it was behind in completing consumers’ data deletion requests and the risk that the data sale would violate three Texas laws. This first article in a two-part series delving into the privacy aspects of the operatic 23andMe bankruptcy proceeding discusses the company’s data assets and policies, the motions on the appointment of a consumer privacy ombudsman and their implications for the case, and how state privacy laws now may play an outsized and disruptive role in data-centric bankruptcies. Part two will cover expansion of privacy’s borders beyond individuals’ data rights to those of others who can be profiled from the data, and will offer steps that companies can consider to address the growing risk of enforcement around sensitive data inferences. See “Examining DOJ’s Final Rules on Access to Government and Sensitive U.S. Personal Data” (Jan. 29, 2025).