Elizabeth Holmes the founder of Theranos had defrauded many investors of billions of dollars by falsely claiming that the technology used in her company for blood tests were revolutionary.
Former President Ramesh Balwani “Sunny”, along with Elizabeth Holmes, was indicted in the month of June on various charges such as false solicitations and advertising and for defrauding investors and doctors.
Unsecured creditors will be repaid soon in cash, says the blood-testing company. Around $60 million has to be paid to unsecured creditors alone. Big investors had lost almost $1 billion from transactions with the company.
Theranos had encouraged patients and doctors to use their blood test services in spite of knowing that the company could not produce reliable results.
Theranos, founded in 2003, is a private healthcare company that falsely claimed that it uses revolutionary technology by collecting very little blood, about a finger prick, for making blood tests.
The blood analyzer has not been peer-reviewed, while the reliability of analysis was not properly checked for its performance.
The Securities and Exchange Commission has charged the company with fraud and Holmes had to let go of her control from the company. She has been barred from acting as a director or as an officer of any other company.
Theranos has been officially dissolved and the dissolution process is to begin from Monday.
Some of the false claims that Theranos made was its usage in the Defense Department in the Afghanistan battlefield. The company had also claimed that it generated $100 million as revenue from this venture. But actual revenue did not cross even $100,000.
Its assets and properties are to be given to Fortress Investment Group and $5 million is to be distributed to creditors.
Shareholders will receive a certificate of dissolution copy to file for tax loss on their investment.