Beleaguered blood diagnostics startup Theranos has reached a settlement with hedge fund handling firm Partner Fund Management( PFM ).
PFM invested $96.1 million in Theranos Series C-2 round in 2014, helping topop the company up to a$ 9 billion valuation. Nonetheless, the hedge fund opened a litigation against Theranos last yearsaying the company had tricked it into investing through a series of lies, substance misstatements, and excisions. PFM further accused Theranos in a separate litigation of engaging in defences fraud and other violations by fraudulently encouraging PFM to invest and conserve its investment in the company.
Theranos was under regulatory inquiry at the time. Nonetheless, the company insisted the PFM lawsuit was without merit and that it would oppose it vigorously.
Terms of the rules of procedure and evidence are confidential, but PFM had sought to compensate itsinvestment in the case and was also asking for expenses. Whatever the terms were, according to a Theranos company statement, PFM will reject all alleges against Theranos and its officers and directors.
Theranos is pleased to have resolved both disputes with PFM. Although we are confident that we would have reigned at visitation, resolution of these two cases earmarks our tender offer to go forward and enables us to render our focus where it belongs, which is on performing our business plans and delivering evaluate for our shareholders, said Theranos General Counsel David Taylor.
Theranos still fronts countless other lawsuits including from former customers and one from previous spouse Walgreens, which is seeking $140 million from the company for breach of contract. Earlier this year, thecompany originated offeringElizabeth Holmes sharesto other investors if they would predict not to indict the company.
Holmes was previously barred from operating in her own laboratory and Theranos was forced to shut down its California lab. The company had now been shut down its abiding laboratory, laid off 41 percent of its workforce and refocused on a tabletop miniLab instead of its most recent one-drop blood measuring technology.
Despite these other hurdles, including the many cases Theranos may still have to be dealt with in courtroom, the company does the rules of procedure and evidence allows it to now go forward with has the intention to marketplace its new miniLab product.
But perhaps this and some other recent winnings are enough to help the company turn things around. In April, Theranos was cleared by the Center for Medicare& Medicaid Services( CMS) and likewise reached aresolution with the Arizona Attorney Generals office, which likewise previously filed specific claims against the company.