June 10 (Reuters) - New York and more than two dozen

other U.S. states sued 23andMe to challenge the sale

of its customers' private information after the genetic testing

company filed for bankruptcy in March.

Twenty seven states, including Pennsylvania, Michigan and

Florida, and the District of Columbia filed the lawsuit on

Monday in 23andMe's U.S. bankruptcy proceedings in Missouri,

seeking a declaration that it cannot sell customers' genetic

data without their consent.

California-based 23andMe in a March bankruptcy filing said

it was seeking to sell its business at auction after a dip in

consumer demand and a data breach in 2023 that exposed genetic

and other information of millions of customers.

The sale will include more than 15 million DNA profiles that

were collected through the company's direct-to-consumer

saliva-testing kits.

"23andMe cannot auction millions of people's personal

genetic information without their consent," New York Attorney

General Letitia James, a Democrat, said in a statement on

Tuesday. "New Yorkers and many others around the country trusted

23andMe with their private information and they have a right to

know what will be done with their information."

23andMe in a statement said the states' arguments were

without merit, and that the sale is permitted under 23andMe

privacy policies and applicable law. "Customers will continue to

have the same rights and protections in the hands of the winning

bidder," the company said.

In a separate filing, Democratic California Attorney General

Rob Bonta's office on Monday said the state was objecting to the

proposed asset sale because it would violate California's

restrictions on the transfer of sensitive genetic material.

23andMe last week told a U.S. bankruptcy judge that it wants

to re-open bidding on its assets after receiving a $305 million

offer from its co-founder Anne Wojcicki.

The company had previously selected a $256 million bid from

Regeneron Pharmaceuticals ( REGN ) as the lead offer. A

representative from Regeneron did not immediately respond to a

request for comment.