Delaware Court Blocks Theranos Tender Offer Ahead of Fraud Trial
The Delaware Court of Chancery has stopped for now a tender offer that investors said would allow Theranos Inc. to "insulate itself" and hinder their ability to claw back a $96 million investment in the embattled blood-testing company.
April 14, 2017 at 03:41 PM
20 minute read
The Delaware Court of Chancery has stopped for now a tender offer that investors said would allow Theranos Inc. to “insulate itself” and hinder their ability to claw back a $96 million investment in the embattled blood-testing company. Vice Chancellor J. Travis Laster on Thursday granted the motion of a San Francisco hedge fund seeking a temporary restraining order to halt the deal, which had been scheduled to close on Friday.
According to court documents, Theranos circulated the tender offer to certain investors last month in an electronic format designed to “disappear” in seven days.
The offer, court papers said, purported to give the investors, including PFM, nonvoting shares from CEO Elizabeth Holmes and a liquidity preference, should the company file for bankruptcy. In exchange, the investors were required to sign a broad release of claims against Theranos.
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