Lawyers get permission to subpoena 3AC’s founders in bankruptcy case

A representative of the lawyers noted that the fund’s counterparties also demand a subpoena, refusing to voluntarily share information about its transactions

13.07.2022 - 10:30

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What’s new? A US court has allowed lawyers in the bankruptcy case of Three Arrows Capital (3AC) to issue subpoenas to the hedge fund’s founders Kyle Davies and Su Zhu to appear at the meeting. Earlier, Teneo Restructuring’s lawyers appointed to assess the fund’s assets, were unable to locate Davies and Zhu and get into 3AC’s Singapore office. They also noted the lack of “cooperating with the proceeding in any meaningful way” and raised concerns that 3AC’s founders would try to move the remaining assets offshore.

Law360’s material

Details of the case. Teneo’s task is to assess and preserve the fund’s assets for sale in order to repay debts to creditors. In making the application for permission to subpoena Davies and Zhu, Teneo representative Adam Goldberg stressed that at this stage of the case it is the lawyers who control the debtor’s assets.

He added that experts at Teneo are seeking information on 3AC’s bank accounts and digital wallets, as well as the transactions conducted using them in recent months. Herewith, in this case, some of the fund’s counterparties also request subpoenas and do not share the information voluntarily, citing the company’s policy, Bloomberg reports.

In late July, a court in the British Virgin Islands ordered the liquidation of Three Arrows Capital. The fund later filed for bankruptcy in the United States. However, the filing form does not allow creditors to seize 3AC’s assets in the US until the liquidation procedure is completed.

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