Sunny Balwani’s Theranos trial delayed after possible Covid exposure

The trial of Ramesh "Sunny" Balwani, the former romantic and business partner of Elizabeth Holmes, was reportedly delayed on Wednesday after a possible Covid-19 exposure forced a judge to send a full courtroom home.

Wednesday was meant to be the day that Balwani finally has his first chance to defend himself against charges that he was Holmes' accomplice in a Silicon Valley scam that brought down the blood-testing startup Theranos.

Jury selection began in the case last week, and prosecutors were set to begin opening arguments on Wednesday. But several news outlets reported that Judge Edward Davila sent everyone home "out of an abundance of caution", because someone in the courtroom had potentially been exposed to Covid-19.

It was not immediately clear when the court would reconvene.

Balwani's trial is taking place in the courtroom where a jury found Holmes guilty of investor fraud and conspiracy in January. She was acquitted on other counts accusing her of duping patients who relied on Theranos' flawed blood tests.

Balwani, 57, has denied the charges.

Holmes, 38, is free on $500,000 bail while awaiting her sentencing in September. That has stirred speculation that she might agree to testify against Balwani if prosecutors agree to recommend leniency in exchange for her cooperation. She is facing up to 20 years in prison.

"It leaves the door open" for Holmes to strike a deal, said Ann Kim, a Los Angeles lawyer who formerly handled fraud cases for the US attorney's office and Securities and Exchange Commission.

There has been no indication that Holmes will testify in Balwani's case. Even if Holmes doesn't take the stand, her specter is likely to loom large throughout Balwani's trial, which is expected to run through mid-June.

Balwani's case marks the latest chapter in a cautionary tale that has inspired films, podcasts and a television show and prompted a reckoning with the Silicon Valley hype machine. Holmes founded Theranos after dropping out of Stanford at age 19 and went on to grace magazine covers and draw comparisons to Steve Jobs. The company promised to revolutionize blood testing, attracting millions of dollars in investments, before reporting by the Wall Street Journal revealed major flaws in the company's proprietary testing machines.

Balwani emerged as a key figure during Holmes' trial, partly because she accused him of subjecting her to a pattern of emotional and sexual abuse that, she implied, might have affected her actions at Theranos.

The abuse allegations, which Balwani's attorney has vehemently denied, were one reason that the US district judge Edward Davila ruled Holmes and Balwani should have separate trials despite facing the same criminal charges.

Other evidence presented during Holmes' trial described a couple bonded by a secret romance and a shared ambition to build a company they promised would revolutionize healthcare.

Balwani, a tech executive who reaped a $40m windfall during the dotcom boom of the late 1990s, became involved with Holmes around the same time she dropped out of Stanford.

Balwani didn't initially play a direct role in Theranos, although Holmes testified that he had tried to sculpt her into a savvier entrepreneur while dictating her diet, daily schedule and friendships. Balwani joined Theranos in 2009 as the company's chief operating officer, a position he held until Holmes ousted him in 2016 amid revelations of rampant inaccuracies in Theranos's blood tests.

Holmes' fortune was estimated at $4.5bn in 2014 while Theranos was working on "wellness centers" in Walgreens stores that were supposed to scan for hundreds of potential health issues with a few drops of blood taken with a finger prick.

While Holmes got the glory, Balwani seemed to envision himself as a mastermind, according to evidence presented at her trial. "I have molded you," Balwani told Holmes in a May 2015 text that became part of the evidence.

The texting exchanges between Balwani and Holmes - many of which included expressions of their love for each other - are expected to come up again during Balwani's trial, along with much of the other evidence submitted during Holmes' proceedings.

Having his trial follow Holmes' could both hurt and help Balwani, Kim said. On one hand, prosecutors now have a better idea of what types of evidence resonate with a jury. But Kim also believes Balwani's lawyers may have a better chance to poke holes in the testimony of the prosecution's witnesses if their remarks deviate from statements during Holmes' trial. Balwani's chances could hinge on how effectively his lawyers can draw a line distancing him from Holmes' actions, a task that could prove difficult if texts like this one resurface during his trial.

"This business can not be built by either you or I alone," Balwani wrote to Holmes in a May 2012 text submitted as evidence during her trial. "That's why the universe brought us together (among other billion reasons)".