Former Theranos CEO Elizabeth Holmes (C) arrives in federal court together with her mother Noel Holmes (L) and father Christian Holmes on September 1, 2022 in San Jose, California.
Justin Sullivan | Getty Images
Elizabeth Holmes has didn’t pay more than $25 million to creditors of her former company Theranos in an try and have her 11-year sentence postponed, in response to the lawsuit.
Theranos ABC, an organization formed on behalf of its creditors, claims in a lawsuit filed in California’s Santa Clara County Supreme Court that “Holmes made no payments on any promissory notes.”
The lawsuit was filed in December 2022 but didn’t come to light until Friday, when Holmes appeared in court.
In line with the breach of contract lawsuit, Holmes executed three promissory notes while she was CEO of a failed blood testing company. In line with the lawsuit, the promissory notes were as follows:
August 2011 in the amount of USD 9,159,333.65.
December 2011 in the amount of USD 7,578,575.52.
December 2013 in the amount of USD 9,129,991.10.
In line with the criticism, “Theranos ABC requested payment of Promissory Note No. 1 and Promissory Note No. 2 from Holmes, but Holmes didn’t pay any amounts under the promissory note.”
Theranos ABC attorneys didn’t immediately reply to a request for comment.
The primary promissory note payment was due in 2016, with the third due in 2018. In July 2016, Theranos’ board of directors, which at the time included Holmes, former Secretary of Defense James Mattis, lawyer David Boies, former Bechtel Group CEO Riley Bechtel and former Wells Fargo CEO Richard Kovacevich modified the terms to increase the bonds for five years. The primary two notes are late, and the third is due in December, the lawsuit said.
Holmes returned to federal court in San Jose, California on Friday, asking for a delay to next month’s jail date while she appeals against her sentence. The person holding the lawsuit approached Holmes at her lawyers’ table in the courtroom. The person, who was becoming increasingly agitated, was removed by the marshals. Whether or not he was a trial server attempting to handle Holmes’ lawsuit couldn’t be confirmed immediately.
In January 2022, a jury found Holmes guilty of 4 counts of electronic fraud and conspiracy. Holmes received a give up order to start her prison sentence on April 27, 2023. Her lawyers have indicated that they intend to appeal the Holmes case to the Ninth Circuit Court of Appeals.
After her conviction last 12 months, Holmes became pregnant and gave birth to her second child.
Holmes’ attorney cited several the explanation why she just isn’t in peril of fleeing, including her young children, and that she has been on bail for more than a 12 months without escaping.
Nonetheless, the government pointed to a one-way ticket that Holmes and her partner, Billy Evans, had booked to Puerto Vallarta, Mexico, days after her conviction.
Holmes can be battling with prosecutors over how much compensation she should pay. Prosecutors want her to pay nearly $900 million, while Holmes says the government has didn’t prove that investors relied on her statements.
U.S. District Court Judge Edward Davila plans to issue a ruling on each motions in early April.
Holmes founded Theranos in 2003 after leaving Stanford, with the promise of revolutionizing the medical industry. The corporate closed in 2016 following a series of failed regulatory audits and articles by then-Wall Street Journal reporter John Carreyrou.