“We Are Now Out of Time”: Theranos to Dissolve
A story in today’s Wall Street Journal reports that Theranos, Inc. will be dissolving itself. Back in April, the company tried to find buyers via Jeffries Group, reaching out to more than 80 potential candidates. “Unfortunately, none of those leads has materialized into a transaction. We are now out of time,” said CEO and General Counsel David Taylor in a letter to company stockholders. He went on to state that the company is in default and owes at least $60 million to its unsecured creditors.
The company has already started the process of negotiating the settlement with Fortress Investment Group, which reportedly loaned $65 million to Theranos last year under the condition that the company maintains a certain cash level—and this has been breached, according to a report in Fortune. Under the settlement, Theranos will distribute nearly $5 million (its only remaining cash) to unsecured creditors.
“On our current path, we intend later this week to seek the necessary Board and
shareholder consents for the Fortress settlement, the Assignment, and the corporate
dissolution, and, assuming consent, to proceed with those actions beginning next
Monday, September 10. Following these actions, the Company will send a letter to
stockholders confirming that there will not be a liquidating distribution to stockholders,
and providing a copy of the certificate of dissolution, for use for tax loss purposes.” – David Taylor, Theranos
A WSJ tweet also noted that in the end, investors will lose nearly $1 billion.
See below for related articles on all coverage of Theranos over the past few years.
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