The saga around Three Arrows Capital (3AC) continues as liquidators charged with the case cannot get in contact with either founder Kyle Davies or Su Zhu. According to a court document filed on Friday 8 July, both the founder’s whereabouts are currently unknown, and liquidators are yet to receive “any meaningful cooperation” from the two.
According to an article published by Reuters, Russell Crumpler and Christopher Farmer, who have been appointed by a British Virgin Island court to serve as 3AC’s liquidators and wind down operations, have approached a U.S. bankruptcy court in Manhattan to seek relief, stating that the founders cannot be located and have not responded to any requests for necessary information. When the court-appointed liquidators recently visited the firm’s office in Singapore, they were met with a locked door and a pile of old mail. An emergency hearing has been convened for Tuesday 12 July to address these concerns.
The court filing outlines:
And while a lawyer in Singapore purporting to represent the Founders recently approached the Foreign Representatives, the Founders have not yet begun to cooperate with the Foreign Representatives in any meaningful manner.
Foreign representatives referred to in the document are Farmer and Crumpler, two senior directors at the advisory firm Teneo has been appointed by a British Virgin Islands court to oversee the liquidation process.
The Singapore-based 3AC filed for Chapter 15 bankruptcy earlier this month, a move that is designed to protect foreign companies’ assets from U.S. creditors. News of the hedge fund’s fate surfaced after it had defaulted on a $650 million loan provided by Voyager Digital, which has since also filed for bankruptcy. 3AC is reported to have also defaulted on a payment to crypto exchange Blockchain.com worth $270 million.
Although Su and Davies's cooperation would delay the liquidation process, concerns were also raised that an “actual and imminent risk” exists that the founders could easily sell off 3AC’s cryptocurrency assets.
Absent provisional relief, there is an actual and imminent risk that the Debtor’s assets may be transferred or otherwise disposed of by parties other than the court-appointed Foreign Representatives to the detriment of the Debtor, its creditors, and all other interested parties. Here, that risk is heightened because a substantial portion of the Debtor’s assets are comprised of cash and digital assets, such as cryptocurrencies and non-fungible tokens, that are readily transferrable.
The liquidators are seeking immediate access to 3AC’s offices in Singapore and information regarding the company’s bank accounts and digital wallets.
Farmer and Crumpler claim that they have been unable to reach Su and Davies and allege that they joined a Zoom call with “person identifying themselves as ‘Su Zhu’ and ‘Kyle,” but “their video was turned off and they were on mute at all times with neither of them speaking despite questions being posed to them directly.” For the duration of the call, the founders communicated through representatives from a Singapore-based legal agency instead.
The court filing indicates that the duo stopped by 3AC’s office in Singapore, but could not gain entry. Stacks of mail lie unopened by the door, with neighbours saying that nobody had been in the offices since May or early June.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.