Elizabeth Holmes owes more than $25 million to Theranos creditors, lawsuit says


Elizabeth Holmes has failed to repay more than $25 million to creditors of her former company Theranos as she tries to delay her 11-year prison sentence, according to a lawsuit.

Theranos ABC, a company created on behalf of its creditors, alleges in a lawsuit filed in California Superior Court in Santa Clara County that “Holmes has made no payment on account of any of the Notes.”

The lawsuit was filed in December 2022 but did not come to light until Friday, when Holmes appeared in court.

According to the breach-of-contract lawsuit, Holmes executed three promissory notes while she was CEO of the failed blood-testing company. The promissory notes were as follows, according to the lawsuit:

  • August 2011 for the sum of $9,159,333.65.
  • December 2011 for $7,578,575.52.
  • December 2013 for $9,129,991.10.

“Theranos ABC demanded payment of Note #1 and Note #2 from Holmes, but Holmes did not pay any amount on account of the note,” the complaint states.

Lawyers for Theranos ABC did not immediately respond to a request for comment.

Two of the first note payments were due in 2016 and the third in 2018. As of July 2016, Theranos’ board of directors, which at the time included Holmes, former Secretary of Defense James Mattis, attorney David Boies, the Former Bechtel Group CEO Riley Bechtel and former Wells Fargo CEO Richard Kovacevich amended the terms to extend the notes for five years. The first two notes are due and the third is due in December, according to the lawsuit.

Holmes returned to federal court in San Jose, California, on Friday and asked to push back the date of his prison report to next month while he appeals his conviction. A man supporting the lawsuit approached Holmes at his attorney’s table inside the courtroom. The man, who became increasingly agitated, was removed by bailiffs. It could not immediately be confirmed if he was a process server trying to deliver the lawsuit to Holmes.

In January 2022, a jury found Holmes guilty of four counts of wire fraud and conspiracy. Holmes was ordered to turn himself in to begin his prison sentence on April 27, 2023. His attorneys have indicated that they intend to appeal Holmes’s case to the Ninth Circuit Court of Appeals.

Following her guilty verdict last year, Holmes became pregnant and gave birth to a second child.

A lawyer for Holmes cited several reasons why he is not a flight risk that included his young children and that he has been out on bail for more than a year without fleeing.

However, the government flagged a one-way ticket that Holmes and his partner, Billy Evans, had booked to Puerto Vallarta, Mexico, days after his conviction.

Holmes is also fighting with prosecutors over the amount of restitution he must pay. Prosecutors want him to pay almost $900 million, while Holmes argues that the government could not prove that investors relied on his representations.

United States District Court Judge Edward Dávila plans to rule on both motions in early April.

Holmes founded Theranos in 2003 after dropping out of Stanford, promising to revolutionize the healthcare industry. The company closed in 2016 after a series of failed regulatory inspections and articles by then-Wall Street Journal reporter John Carreyrou.

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