Three Arrows' Assets Frozen in Emergency Hearing
A judge has ruled that the firm cannot transfer or dispose assets held in the U.S.
Key Takeaways
- An emergency hearing was held today concerning Three Arrows Capital (3AC) and its recent bankruptcy filing.
- Judge Glenn Martin froze the firm's funds; he also gave liquidators the ability to claim assets and issue subpoenas.
- Three Arrows Capital's co-founders are not cooperating with proceedings, and their location is unknown.
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Three Arrows Capital (3AC) has had its assets frozen as part of recent court proceedings, according to various reports.
Bankruptcy Judge Clamps Down On 3AC
An emergency hearing was held Tuesday in the New York Southern Bankruptcy Court for creditors of Three Arrows Capital.
During the proceedings, Judge Glenn Martin ruled that Three Arrows Capital cannot transfer or dispose of assets held in the United States, according to reports from Yahoo! Finance today.
Additionally, Judge Martin ruled that liquidators have the authority to claim 3AC’s U.S. assets, according to Reuters. Liquidators can also issue subpoenas to 3AC’s founders and roughly 24 companies that may have relevant information.
Court-appointed liquidators seek to determine the value and location of 3AC’s assets, which are largely unaccounted for.
Adam Goldberg, the lawyer for the liquidators, says that only two groups of assets have been found to date: a legal retainer with the New York-based firm Dan Tan Law and “rights under a variety of New York law loan agreements.”
Goldberg also noted that, because 3AC’s assets are digital, there is a high risk that the founders will escape with those assets unless today’s court order is enforced.
He told Reuters that today’s court order is meant to “put the world on notice” that the liquidators now control 3AC’s assets.
3AC Founders Are Not Cooperating
Three Arrows Capital filed for bankruptcy on Friday, Jul. 1 under Chapter 15 of the U.S. Bankruptcy Code.
Today’s emergency hearing has been expected since late last week after Three Arrows Capital co-founders Su Zhu and Kyle Davies failed to cooperate with initial proceedings.
On Friday, Jul. 8, court documents indicated that the two individuals attended an online hearing. However, they did not turn on audio and video and would not respond to questions. Only their legal representation participated.
It is believed that Zhu and Davies recently fled Singapore; their location is still unknown. Three Arrows Capital’s Singapore offices have reportedly been abandoned as well.
Despite his disappearance, Zhu posted an update today. On Twitter, he claimed that liquidators “baited” the company during discussions and failed to exercise a token offer.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.
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