Blood-testing firm Theranos to dissolve

The blood-testing firm Theranos will soon cease to exist. According to an email sent to shareholders late Tuesday, Theranos General Counsel and CEO David Taylor said company will formally dissolve and seek to pay unsecured creditors its remaining cash in the coming months.

The blood-testing firm Theranos will soon cease to exist. According to an email sent to shareholders late Tuesday, Theranos General Counsel and CEO David Taylor said company will formally dissolve and seek to pay unsecured creditors its remaining cash in the coming months. The move comes after federal prosecutors filed criminal charges against Theranos founder Elizabeth Holmes and former President Ramesh "Sunny" Balwani, charging them with defrauding investors out of hundreds of millions of dollars. The executives have denied all charges and now face a criminal trial. The dissolution process was precipitated by the fact that Theranos breached a covenant governing a $65 million loan it received from Fortress Investment Group last year. Under the loan terms, Fortress was entitled to foreclose upon the company's assets if its cash fell beneath a certain threshold. The company is hoping to negotiate a settlement with Fortress that would give the private-equity firm ownership of the company's patents but leave its remaining cash for distribution to other unsecured creditors.