Elizabeth Holmes was once worth more than $6 billion just four years ago but now she allegedly can’t afford to pay for her lawyers.
Former Theranos chief executive Elizabeth Holmes was once listed by Forbes as the world’s youngest self-made billionaires but her fall from grace has been so spectacular she reportedly can’t afford to pay legal fees.
Three lawyers from the Cooley LLP firm said they haven’t been paid for more than a year while defending the former businesswoman’s fraud charges.
“Further, given Ms Holmes’s current financial situation, Cooley has no expectation that Ms Holmes will ever pay it for its services as her counsel,” lawyers Stephen Neal, John Dwyer and Jeffrey Lombard said in a filing according to The Mercury News.
The law team is seeking approval from the court to ditch the former high-flyer in her class-action battle in which plaintiffs accuse her, her former blood-testing company Theranos and Walgreen of fraud in Arizona and Palo Alto.
“It is unfair and unreasonable to require Cooley to continue representing Ms Holmes in this action,” the lawyers said.
The former billionaire shot to fame after founding her revolutionary blood testing company Theranos in 2003 at just 19 years of age.
It claimed to have invented blood tests that only required very small amounts of blood from a fingerprick instead of a needle.
Theranos raised more than $US700 million ($A997.5 million) from venture capitalists and private investors, resulting in a $US10 billion ($A14 billion) valuation at its peak in 2013 and 2014.
In 2015, Ms Holmes was celebrated as the youngest and wealthiest self-made female billionaire in the US with an estimated net worth of $US4.5 billion ($A6.4 billion).
But in 2016, everything started to fall apart.
That multibillion-dollar estimated fortune was slashed to $0 by Forbes as Ms Holmes was faced with mounting allegations of potential fraud, which allegedly duped investors out of millions.
She and former Theranos chief operating officer and president Ramesh “Sunny” Balwani were charged with nine counts of wire fraud and two counts of conspiracy to commit wire fraud, with both pleading not guilty.
In September 2018, Theranos was shut down for good. The trial was due to start in August 2020.
NEW LEGAL WIN
Although Ms Holmes has been hit with setback after setback, she enjoyed a rare legal win in July.
She appeared in a San Jose courtroom, ditching her trademark black turtleneck — modelled on her hero Steve Jobs — for a stylish, sleeveless black dress and blazer.
She seemed relaxed and even smiled for cameras upon arrival, but ignored questions from waiting reporters including CNBC’s Yasmin Khorram, who asked if she would ever make a public statement on the scandal.
Ms Holmes has remained notoriously tight-lipped regarding her downfall.
According to Bloomberg, her lawyers had demanded “millions of documents” from the US Food and Drug Administration (FDA) which they argued would be crucial to her defence.
The FDA had claimed they would take up to six months to hand over — a time frame her lawyers had slammed as hurting her case.
In June, lawyer Lance A. Wade said prosecutors who had access to those documents enjoyed an unfair advantage, but that when Ms Holmes’ team tried to access them “suddenly the regulatory haze appears in front of all of these requests”, Bloombergreported him as saying.
At a sentencing hearing in July, US district judge Edward Davila agreed six months was “too long”.
Ms Holmes is also after records from the Centres for Medicare and Medicaid Services, and the judge ordered the agencies to produce them within 75 days.
Ms Holmes and Mr Balwani claim those documents could help them prove they were unaware that Theranos’ tests were inaccurate and that they had therefore not knowingly misrepresented the company’s achievements.
However, the FDA is concerned the documents in question could effectively out an anonymous whistleblower.
The trial is due to commence in August 2020 but if the FDA fails to provide the documents, it is feared it could cause a delay.