3AC creditors frustrated with bankruptcy proceedings
The bankruptcy case surrounding collapsed crypto hedge fund Three Arrows Capital (3AC) is still unfolding; Co-founder Kyle Davies claims the company’s creditors are “disappointed” with how the operation has unfolded, citing high legal costs, among other things, as reasons for the deadlock.
Creditors are causing delays, says Kyle Davies
Kyle Davis, co-founder of bankrupt hedge fund Three Arrows Capital (3AC), revealed in a series of tweets that the company has set up a creditors’ committee to address some issues related to the company’s bankruptcy process.
According to Davies, creditors are frustrated with how the situation has unfolded, citing increased legal costs as one of the main reasons for the perceived stumbling block in the process.
In addition, he noted, the group believes assets are not being managed appropriately, and the value of the property is not being “maximized”.
“We believe the best way forward is to reduce ongoing legal costs, pursue claims on a contingent basis against Luna Consortium/FTX/Genesis, and streamline better ways to handle asset sales/distributions.”
Kyle Davis, Founding Partner, Three Arrows Capital (3AC),
Some of the primary topics for discussion at the meeting are proposed plans to pursue claims against certain debtors, including Do Kwon’s Luna and Sam Bankman-Fried’s FTX and Genesis, and better regulation of asset sales. Davis said meetings would become regular and encouraged all creditors to join the committee.
It’s been a tumultuous period for the Singapore-based fund since it filed for Chapter 11 bankruptcy in July 2022. The whereabouts of both founders became a matter of controversy as reports surfaced that both men had disappeared, which inevitably stalled the company’s asset recovery process. The liquidators have begun.
In a new development on January 5, Davis was subpoenaed by the United States Bankruptcy Court for the Southern District of New York to issue documents enabling access to 3AC’s assets. Then the lawyers representing the liquidators moved on to tag The 35-year-old tweeted a redacted version of the subpoena.