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Lawsuit Alleges Elizabeth Holmes Owes $25 Million to Creditors, Misses Promissory Notes’ Payments

Lawsuit Alleges Elizabeth Holmes Owes $25 Million to Creditors, Misses Promissory Notes’ Payments

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CEO/founder of Theranos Elizabeth Holmes attends the 2015 Time 100 Gala at Frederick P. Rose Hall, Jazz at Lincoln Center on April 21, 2015 in New York City. Shutterstock / Debby Wong

A lawsuit claims that Elizabeth Holmes, who is attempting to postpone her 11-year prison term, has not repaid creditors of her former blood-testing startup Theranos company more than $25 million. The former CEO “has not made any payments” on behalf of “any of the promissory notes she promised to the company. Theranos ABC, a business established on behalf of creditors, filed a lawsuit in December 2022 in the Superior Court of California in Santa Clara County, reports said.

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The breach of contract suit claims that while she was the CEO, Holmes made three written commitments to pay back creditors: for $9,159,333.65, $7,578,575.52, and $9,129,991.10, respectively. According to CNBC, the first two 2011 notes were due for payment in 2016, and the third was due in 2018. The lawsuit stated that Holmes was granted an extra five years by the Theranos board in July 2016, which meant the first two payments were past due and the third was due in December. She appeared at a meeting to put off the start of her prison term, which was scheduled to begin on April 27, reports said.

In November, Holmes received a sentence of more than 11 years in prison after being convicted guilty of four fraud-related charges. She appealed in the first few days of December.

A jury held Holmes responsible for four counts of conspiracy and wire fraud in January 2022. On April 27, 2023, Holmes was supposed to turn herself in to start her jail term. She intends to appeal Holmes’ case to the Ninth Circuit Court of Appeals, according to her lawyers. A lawyer for Holmes listed several factors, including her small children and the fact that she has been out on bail for more than a year without evading capture, as justifications for why she is not a flight risk.

However, the prosecution cited a one-way ticket Holmes and her companion Billy Evans had purchased to Puerto Vallarta, Mexico, a few days after their sentencing.

Holmes is at odds with the prosecution over the amount of restitution she needs to make. She contends that the government failed to show that investors depended on her representations, and the prosecution wants her to pay close to $900 million. In early April, U.S. District Court Judge Edward Davila is expected to rule on both petitions.

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Elizabeth Holmes Sentenced to 11 + Years For Theranos Fraud: Will Appeal In April 2023

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