3AC liquidators look to recoup $1.3B from founders

Teneo, the liquidator behind bankrupt hedge fund Three Arrows Capital (3AC), is reportedly seeking to recover roughly $1.3 billion in funds from 3AC founders Su Zhu and Kyle Davies.

According to a June 27 Bloomberg report, the liquidator claimed Davies and Zhu incurred the $1.3 billion of debt when 3AC was already insolvent, adding to creditors’ losses. 3AC reportedly owed creditors $3.5 billion, making the founders’ potential liability more than a third of the total debt.

A Teneo spokesperson told Cointelegraph that the goal of seeking $1.3 billion from the 3AC founders was “generally reflective” of a June 27 creditor presentation. At the time of publication, court documents did not appear to include this information.

The report came precisely one year after a court in the British Virgin Islands ordered 3AC into liquidation on June 27, 2022. In July 2022, the firm also made a Chapter 15 filing in the U.S. Bankruptcy Court for the Southern District of New York.

Though Davies and Zhu have remained active on social media through the liquidation process, their physical whereabouts have been largely unknown. In June, the pair helped launch Open Exchange, a platform for trading claims against bankrupt crypto entities.

Related: 3AC: A $10B hedge fund gone bust with founders on the run

Lawyers for the liquidator in the U.S. have also attempted to make Davies and Zhu answer in court during the bankruptcy proceedings. Both 3AC founders have been issued digital subpoenas, and the legal team sought to hold Davies in contempt of court for having “repeatedly defied their obligations.”

The 3AC founders’ former assets include a digital art collection being auctioned off through Sotheby’s. One piece of the collection, Dmitri Cherniak’s artwork “The Goose,” sold for $6.2 million in June.

Magazine: Huobi sues… Huobi? 3AC rises from ashes, Korea crypto contagion: Asia Express

Sourced from cointelegraph.com.

Written by Turner Wright on 2023-06-30 13:31:00.

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