Walgreens has filed a $140 million lawsuit against blood-testing company Theranos, a former business partner.
In the complaint filed on Tuesday in the District Court of Delaware, Walgreens alleges that Theranos has breached a contract, but details are scarce as the retailer has gotten the complaint sealed due to non-disclosure agreements, according to media reports. A Walgreens’ spokesman confirmed to Fortune that the company has filed the lawsuit but declined to share more details.
Theranos and Walgreens first teamed up in 2010, and opened Theranos “Wellness Centers” in 40 locations where they offered blood-tests to patients. Theranos, founded in 2003 by Elizabeth Holmes, set out to develop technology that would allow for blood tests to be performed with just a few drops of blood from a finger prick.
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In the past year, however, a series of reports from the Wall Street Journal raised questions about the technology and its accuracy. Since then, Theranos has found itself at the receiving end of multiple lawsuits and government investigations. The Center for Medicare and Medicaid Services also banned Holmes from operating a lab for two years, and in June, Walgreens severed its ties with the company.
Walgreens’ lawsuit reportedly claims that it was misled by Theranos over the state of its blood-testing technology when the companies first struck a deal and even as its technology was beginning to be challenged, according to the Wall Street Journal, citing anonymous sources. Walgreens invested $140 million in Theranos in the form of debt convertible to equity, which is the amount it seeks to recover in the lawsuit.
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“We are disappointed that Walgreens filed this lawsuit. Over the years, Walgreens consistently failed to meet its commitments to Theranos,” the company said in a statement published on its website. “Through its mishandling of our partnership and now this lawsuit, Walgreens has caused Theranos and its investors significant harm. We will respond vigorously to Walgreens’ unfounded allegations, and will seek to hold Walgreens responsible for the damage it has caused to Theranos and its investors.”
Last month, Theranos announced it was closing down its its labs and “Wellness Centers,” and shifting its efforts onto its “minilab,” a device for blood-testing it intends to sell to clinics. It laid off 340 employees, or nearly half of the 790 employees it had as of August.