After being sanctioned by U.S. regulators, the company now faces at least eight other lawsuits filed in federal courts in California and Arizona by patients who claim that faulty blood tests led to heart attacks or other issues. It's also facing fraud claims in state court in Delaware from one of its investors [Partner Fund Management]." - Bloomberg, October 14, 2016. Here is the article.
This development was expected. After all, inaccurate testing can be hazardous to the life and health of patients. In addition, if Theranos founder, Elizabeth Holmes, had misrepresented the startup's supposed breakthrough technology to investors, that would constitute securities fraud.
As followers of the rise and fall of Theranos know, Holmes is attempting to save the company by making it a technology one. Earlier it had been a lab testing one. Regulators have banned Holmes from being in that industry. She is appealing that.
But her latest initiative - development of the minilab - may not bring salvation. To do that, given the eight lawsuits, she might have to file for the protection of Chapter 11.
On the board of Theranos and advising Holmes is superlawyer David Boies. It was he who had gone to The Wall Street Journal editorial office to attempt to stop publication of the article which questioned the accuracy of the proprietary technology. But his huffing and puffing, as BusinessInsider reports, didn't halt the story in October 2015.
After the article appeared about a year ago, the whole edifice that was Theranos came down. Other members of the media turned on it. Holmes' MO, some claim, had been to put together an amazing story. Just as Steve Jobs had done. The difference was, of course: Jobs had the products to align with his story-telling.