Did her lawyers expect otherwise? This weekend’s news of Elizabeth Holmes’ legal team at Cooley LLP withdrawing their representation services due to non-payment should not have caused much surprise. Cooley’s attorney team petitioned the court to withdraw from the case, stating that “Ms. Holmes has not paid Cooley for any of its work as her counsel of record in this action for more than a year.”
Cooley was representing Ms. Holmes in a class-action civil suit in Phoenix brought against her, former Theranos president Sunny Balwani, and Walgreens, charging fraud and medical battery. (When they withdraw, will she seek public representation based on poverty?)
Perhaps Ms. Holmes is the one who’s setting priorities, as the civil suit would be for monetary damages, and no money means there will be none for the plaintiffs to collect. The DOJ charges are a different story. She is on the hook for nine counts of wire fraud and two counts of conspiracy related to her actions at Theranos. Conviction on these could send her to Club Fed for 20 years plus a fine of $250,000 plus restitution for each charge. [TTA 16 June].
Last Wednesday, both Ms. Holmes and lawyers for her and Mr. Balwani were in Federal court in San Jose on the wire fraud and conspiracy charges, demanding that the government release documents from the Food and Drug Administration (FDA) and the Centers for Medicare and Medicaid Services (CMS) that allegedly would clear them. After an hour, Judge Davila set 4 November as the next hearing date.
Defending oneself does not come cheap, but after your company’s value crashes to $0 from $9bn, one might be looking for change in your Roche-Bobois couch and wondering if your little black Silicon Valley-entrepreneur formal pantsuit/white shirt ensembles will last through the trial. CNBC 2 Oct, CNBC 4 Oct, Fox Business, Business Insider
[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2016/11/jacobs-well-texas-woe1.jpg” thumb_width=”150″ /]It was the fault of the scientists and the investors!
That is the speculation of Quora poster Drew Smith
, a former R&D director at biotech firms MicroPhage and SomaLogic. It was a round robin of founder/CEO Elizabeth Holmes’ all-too-rosy forecasts and scientists not wanting to toss a wet wool blanket on the fun by telling her what she didn’t want to hear. Mr Smith, from where his experience lies, believes that the scientists discarded the testing with bad results, passing on only the good even if flawed, in a delusional circle that ultimately went pear-shaped. Then there were the investors, who didn’t apply the usual Deep Discount to the Big Hype that all entrepreneurs weave around the Revolutionary Whatevers, for whatever reason. On this, Mr Smith doesn’t speculate. It must have been those wide-screen blue eyes, black turtlenecks, and nanotainers that kept them mesmerized. Theranos wouldn’t be the first company that failed because they believed their own press releases and pictures! Forbes Hat tip to reader Bill Oravecz of Stone Health Innovations and WTO Associates.
And the law firms multiply. Continuing to fight Theranos’ many lawsuits in multiple courts are a bevy of Big Law firms. In Chapter 26, Boies Schiller exited, stage left, and Wilmer Hale (formally Wilmer Cutler Pickering Hale and Dorr) entered. Wilmer Hale is representing Theranos in the California class action lawsuit described in Chapter 27 and what we’ve deduced is the Partner Fund Management lawsuit filed in Delaware (Chapter 21). Here’s where Santa unloads his jolly pack of toys for the Law Boys. Cooley LLP (32nd on The American Lawyer’s 2016 Am Law 200 ranking) is busy representing Ms Holmes, who has been separately sued by Partner Fund Management, and defending an Arizona lawsuit (Chapter 22). And on deck for Theranos in the Walgreens action, also in Delaware? (Chapter 23) Newcomer Wilkinson Walsh + Eskovitz, founded earlier this year by top trial lawyers from larger firms. All those billable hours add up to gold in their stockings, coal in Theranos’. Law.com
See here for the 28 previous TTA chapters in this Continuing, Consistently Amazing Saga.