The Three Arrows Capital (3AC) has once again gained the spotlight and this time liquidators assigned to the case are unable to contact either founder Kyle Davies or Su Zhu. According to a court document filed on Friday, July 8, both the founder’s and liquidators’ whereabouts are currently unknown, and neither has provided “any meaningful cooperation.”
According to Reuters, Russell Crumpler, and Christopher Farmer – the British Virgin Island court’s delegates to serve as 3AC’s liquidators and conclude operations, have approached a United States bankruptcy court in Manhattan to seek relief, claiming that the founders cannot be found and have not responded to any requests for necessary information. When the court-appointed liquidators visited the firm’s Singapore office recently, they were met with a locked door and a stack of old mail. To address these concerns, an emergency hearing has been scheduled for Tuesday, July 12th.
According to the court filing: And, despite the fact that a lawyer in Singapore claiming to represent the Founders recently approached the Foreign Representatives, the Founders have yet to begin meaningful cooperation with the Foreign Representatives.
The document refers to Farmer and Crumpler, two senior directors at the advisory firm Teneo who have been appointed by a British Virgin Islands court to supervise the liquidation process.
3AC, based in Singapore, filed for Chapter 15 bankruptcy previously this month, a move intended to safeguard foreign companies’ assets from U.S. creditors. The hedge fund’s future became public after it defaulted on a $650 million loan from Voyager Digital, which has since declared bankruptcy. 3AC is also said to have missed a $270 million payment to cryptocurrency exchange Blockchain.com.
Although Su and Davies’ cooperation would postpone the liquidation, there is an actual and impending risk that the founders could easily sell off 3AC’s cryptocurrency assets.
In the absence of provisional relief, there is an actual and impending risk that the Debtor’s assets will be transferred or otherwise disposed of by parties other than the court-appointed Foreign Representatives, to the disability of the Debtor, its creditors, and all other interested parties. This risk is heightened in this case because a significant portion of the Debtor’s assets is cash and easily transferable digital assets, like cryptocurrencies and non-fungible tokens.
The liquidators want immediate access to 3AC’s Singapore offices as well as information about the company’s bank accounts and digital wallets.
Farmer and Crumpler claim they have been unable to contact Su and Davies, and that they joined a Zoom call with “persons identifying themselves as ‘Su Zhu’ and ‘Kyle,’ however, their video was not switched on and they were on mute at all times, with neither of them speaking despite questions presented to them directly. During the call, the founders communicated through representatives from a Singapore-based legal firm.
According to the court filing, the duo attempted to enter 3AC’s Singapore office but were denied entry. Stacks of mail lay unopened by the door, and neighbors reported that no one had been in the offices since May or early June.
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