David Orrell | CNBC
Theranos said it has settled lawsuits with one of its biggest backers.
The blood test start-up said monday he had reached a confidential settlement with hedge fund Partner Fund Management, which invested more than $96 million in Theranos in 2014.
Partner Fund Management had accused Theranos of securities fraud, alleging the company attracted the investment'[t]through a series of lies, material
The fund declined to comment on CNBC.
Theranos has been the target of fire in recent years, after the wall street journal investigations have called into question the effectiveness of its blood-testing technology, raising flags for regulators. But Theranos has now resolved the proceedings with the as good as Arizona Attorney General.
Resolving those disputes means founder Elizabeth Holmes can move forward with a plan to divest part of her stake in the company, according to a company press release. the Newspaper previously reported the stock offering, noting that in exchange for receiving additional shares, shareholders had to agree not to sue the company.
Holmes plans to donate shares to “largest shareholders,” nearly all of whom have agreed to participate in the deal, according to the Theranos statement. It was unclear whether the investors had agreed not to sue under the arrangement.
“Theranos is pleased to have resolved both lawsuits with PFM. While we are confident that we would have been successful at trial, the resolution of these two cases allows our public offering to proceed and allows us to return to where we need to focus, which is on executing our business plans and creating value for our shareholders,” Theranos General Counsel David Taylor said in a statement.
Watch: Theranos founder gives shares to avoid lawsuits