According to a lawsuit, Elizabeth Holmes has not paid back more than $25 million to creditors of her former Theranos business as she attempts to delay her 11 year sentence.
Theranos ABC was a company that was set up to represent its creditors. In a lawsuit in Santa Clara County Superior Court, Theranos claims that “Holmes have not made any payments in account of any of Themissory Notes.”
Although the suit was filed in December 2022 it wasn’t discovered until Friday when Holmes appeared in court.
According to the breach-of-contract suit, Holmes executed three promissory letters while she was CEO at the failed blood-testing business. According to the lawsuit, the promissory notes read as follows:
- August 2011, $9,159,333.65
- December 2011, $7,578,575.52.
- December 2013, $9,129.991.
The complaint stated that “Theranos ABC demanded payment of Promissory Notice #1 and Promissory NOTE #2 from Holmes, but Holmes failed to pay any amounts due to Promissory note.”
Theranos ABC attorneys did not respond immediately to a request for comment.
The first two promissory notes payments were due in 2016, and the third in 2018. Theranos’ board, which included Holmes, ex-Secretary of Defense James Mattis and attorney David Boies, as well as Riley Bechtel Group CEO Riley Bechtel, Richard Kovacevich, was able to modify the terms to extend the note payments by five years. According to the suit, the first two notes were due by December and the third is due in December.
Holmes, who was in San Jose, Calif., for her appeal, asked to be delayed her report date to prison. Holmes was approached by a man who held the lawsuit at her table in the courtroom. He became increasingly angry and was eventually removed by marshals. It was not immediately clear if the man was a process server who tried to serve the suit against Holmes.
found Holmes guilty of four counts each of wire fraud and conspiracy. Holmes was required to surrender to start her sentence in prison on April 27, 2023. Holmes was ordered to surrender by her attorneys to begin her sentence in prison on April 27, 2023.
Holmes was convicted last year and fell pregnant. She gave birth to her second child.
Holmes’ lawyer cited many reasons she is not a flight risk, including her children and the fact that she has been released on bail for over a year without fleeing.
The government pointed out that Holmes and her partner, Billy Evans had booked a one-way ticket to Puerto Vallarta Mexico just days after she was convicted.
Holmes is also fighting with the prosecutors about how much she should pay in restitution. Holmes claims that the government failed to prove that investors relied upon her representations. Holmes is being sued by her accusers for nearly $900 million.
U.S. District Judge Edward Davila will rule on both motions in April.
After dropping out from Stanford in 2003, Holmes founded Theranos with the promise to revolutionize the healthcare industry. After a string of failed regulatory inspections, and articles written by John Carreyrou (Wall Street Journal reporter), the company was forced to close its doors in 2016.
