Liquidators seek $1.3B from 3AC founders.
Teneo, the liquidators in charge of the bankruptcy of the hedge fund Three Arrows Capital (3AC), are reportedly trying to recover approximately $1.3 billion from founders Su Zhu and Kyle Davies.
According to a Bloomberg report from June 27, Davies and Zhu accumulated the $1.3 billion debt when 3AC was already insolvent, which added to the losses of creditors. 3AC allegedly owed creditors $3.5 billion, making the potential liability of the founders more than a third of the total debt.
A spokesperson for Teneo told Cointelegraph that seeking $1.3 billion from the 3AC founders was “generally reflective” of a creditor presentation from June 27. At the time of publication, court documents did not seem to include this information.
The report came exactly one year after a court in the British Virgin Islands ordered 3AC into liquidation on June 27, 2022. In July 2022, the firm also filed for Chapter 15 bankruptcy in the U.S. Bankruptcy Court in the Southern District of New York.
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Although Davies and Zhu have remained active on social media throughout the liquidation process, their physical whereabouts have largely been unknown. In June, the pair helped launch Open Exchange, a platform for trading claims against bankrupt crypto entities.
3AC is dead, long live 3AC Ventures https://t.co/61s8uQquOZ
— Kyle Davies (@KyleLDavies) June 21, 2023
Related: 3AC: A $10B hedge fund gone bust with founders on the run
Lawyers for the liquidators 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 included a digital art collection that was being auctioned off through Sotheby’s. Pieces from the collection, such as Dmitri Cherniak’s artwork ‘The Goose’, sold for $6.2 million in June.
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