Cooley Says Elizabeth Holmes Has Growing Unpaid Legal Bill In Theranos Civil Case
Cooley's Stephen Neal, John Dwyer and Jeffrey Lombard have asked to bow out of a civil case in Arizona federal court, saying Holmes hasn't paid them in more than a year and likely won't be able to going forward.
October 04, 2019 at 03:56 PM
3 minute read
The original version of this story was published on The Recorder
Elizabeth Holmes, founder and former chief executive officer of Theranos Inc., arrives at federal court in San Jose, California, on Oct. 2, 2019. Photographer: Michael Short/Bloomberg
Three Cooley lawyers representing Elizabeth Holmes have asked a judge to let them quit a civil case against the former CEO of defunct blood-testing startup Theranos. In a court filing, they said Holmes hasn't paid them for more than a year and probably never will.
Cooley chairman Stephen Neal, Palo Alto partner-in-charge John Dwyer and associate Jeffrey Lombard filed the motion on Sept. 30 in U.S. District Court in Phoenix, claiming that "Ms. Holmes has not paid Cooley for any of its work as her counsel of record in this action for more than a year.
"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," the three attorneys said in the filing, asking to be removed from their representation of Holmes in the civil lawsuit.
"It is unfair and unreasonable to require Cooley to continue representing Ms. Holmes in this action," they wrote.
The plaintiffs in the class action civil case are ex-Theranos customers. They sued Holmes, her company and Walgreens, which had offered Theranos blood-testing services in Arizona and Palo Alto, alleging fraud, and in the cases of Walgreens and Theranos, medical battery.
Both Theranos and Walgreens have denied the allegations.
In the same case, Holmes was previously represented by lawyers from Boies Schiller Flexner, Wilmer Cutler Pickering Hale and Dorr, and Wilkinson Walsh & Eskovitz, but those firms have left the case, court records show.
Holmes is also facing federal conspiracy and fraud charges related to the collapse of the company. Holmes and her co-defendant, former Theranos COO and President Ramesh "Sunny" Balwani, were indicted by a grand jury in June 2018. The two have pleaded not guilty to 11 criminal counts of wire fraud and conspiracy to commit wire fraud.
In the criminal case, Holmes is represented by Kevin Downey of Williams & Connolly and San Francisco criminal defense attorney John Cline. Balwani is represented by Jeffrey Coopersmith, who recently moved from Davis Wright Tremaine to Orrick, Herrington & Sutcliffe.
The criminal trial of the two founders has been scheduled to start in the summer of 2020. At a pretrial hearing in June, U.S. District Judge Edward Davila of the Northern District of California set jury selection in the criminal case for July 28, 2020, with a trial to follow Aug. 4.
Holmes has already paid the U.S. Securities and Exchange Commission a $500,000 penalty to settle fraud charges. She is also barred from serving as an officer or director of a public company for 10 years, and returned the remaining 18.9 million shares of stock she owns in Theranos.
Cooley did not immediately respond to a request for comment Friday.
Read More
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Theranos CEO Elizabeth Holmes Indicted in Alleged Wire Fraud Scheme
SEC Charges Theranos, CEO Holmes, and Former President With Investor Fraud
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