Lawsuit claims Elizabeth Holmes owes more than $25 million to Theranos creditors, report says

Former Theranos CEO Elizabeth Holmes alongside her boyfriend Billy Evans, walks back to her hotel following a hearing at the Robert E. Peckham U.S. Courthouse on March 17, 2023 in San Jose, California.
Theranos founder Elizabeth Holmes appeared in court Friday.Philip Pacheco/Getty Images
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  • Elizabeth Holmes owes creditors of her failed startup Theranos more than $25 million, CNBC reported.

  • A lawsuit filed in December accused the former CEO of missing payments on three promissory notes.

  • It emerged as Holmes appeared in court Friday seeking to delay her date to report to prison.

Elizabeth Holmes owes creditors of her failed blood-testing startup Theranos more than $25 million, a new lawsuit claimed.

The former CEO "has not made any payments on account of any of the promissory notes," according to CNBC.

The outlet obtained a copy of the lawsuit filed in December 2022 in the Superior Court of California in Santa Clara County by Theranos ABC, a company set up on behalf of creditors.

According to the report, Holmes made three written promises to repay creditors while she was still CEO.

The first note for more than $9 million was written in August 2011, followed by one worth more than $7.5 million in December that year. A third note was written in December 2013 for more than $9 million.

The two 2011 notes were due to be paid in 2016 while the third was due in 2018, per CNBC.

In July 2016 Holmes was given an additional five years by the Theranos board to make payments, the lawsuit said, meaning the first two were now overdue, while payment for the third was due by December.

The lawsuit came to light after Holmes was approached in court in San Jose, California on Friday, CNBC reported.

She attended a hearing that sought to delay the start of her prison sentence, set for April 27, while her lawyers appealed against her conviction, The Associated Press reported. US District Judge Edward Davila told the court he hoped to make a ruling by early April.

Earlier this month the same judge rejected a bid by Holmes' accomplice Ramesh "Sunny" Balwani, who is facing close to 13 years in jail, to avoid prison. He was due to report to a federal prison in California on Thursday, but his lawyer was able to create a delay, per The AP. 

After being found guilty of four fraud-related charges, Holmes was sentenced in November to more than 11 years in prison. She lodged an appeal in early December.

A court filing in February also revealed that Holmes had recently given birth to her second child and was seeking to delay her incarceration.

Prosecutors said the 39-year-old still showed "no remorse to victims" of Theranos and was living on an estate costing $13,000 a month during her appeal, Insider reported. Prosecutors are seeking restitution of almost $900 million for investors in Theranos, per The AP.

Lawyers for Holmes didn't immediately respond to a request for comment from Insider, made outside normal working hours.

Read the original article on Business Insider