Key Takeaways
- Today, an emergency hearing regarding Three Arrows Capital (3AC) and its recent bankruptcy filing was held.
- Judge Glenn Martin froze the company’s assets and authorized liquidators to seize assets and issue subpoenas.
- The co-founders of Three Arrows Capital are not cooperating with proceedings and their location is unknown.
According to multiple reports, Three Arrows Capital (3AC) has had its assets frozen as part of recent court proceedings.
A bankruptcy judge restricts 3AC
Tuesday, creditors of Three Arrows Capital appeared before the New York Southern Bankruptcy Court for an emergency hearing.
Judge Glenn Martin ruled during proceedings that Three Arrows Capital cannot transfer or dispose of assets held in the United States, Yahoo! Finance reported today.
According to Reuters, Judge Martin ruled that liquidators have the authority to claim 3AC’s U.S. assets. Additionally, liquidators can issue subpoenas to 3AC’s founders and approximately 24 companies that may have pertinent information.
Court-appointed liquidators are attempting to determine the value and location of 3AC’s largely unaccounted-for assets.
The lawyer for the liquidators, Adam Goldberg, states that only two groups of assets have been discovered 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 added that because 3AC’s assets are digital, there is a high likelihood that the founders will flee with them if the current court order is not enforced.
According to him, the purpose of today’s court order is to “warn the world” that the liquidators now control 3AC’s assets.
3AC Founders Are Not Working Together
On Friday, July 1, Three Arrows Capital filed for Chapter 15 bankruptcy under the United States Bankruptcy Code.
Since late last week, when Three Arrows Capital co-founders Su Zhu and Kyle Davies refused to cooperate with initial proceedings, today’s emergency hearing has been anticipated.
According to court documents, the two individuals attended an online hearing on Friday, July 8. However, they did not activate audio and video and refused to answer questions. Only their legal representatives were present.
Zhu and Davies are believed to have recently fled Singapore; their location is unknown. The Singapore offices of Three Arrows Capital have reportedly been abandoned as well.
Today, despite his disappearance, Zhu published an update. On Twitter, he asserted that liquidators “baited” the company during negotiations by failing to accept a token offer.
