Bankruptcy Court Judge assents subpoenas to 3AC founders

The legal team attempting to recoup funds from beleaguered crypto fund Three Arrows Capital have gotten the green light to issue subpoenas to the founders and relevant firms for information in the investigation.

A judge in the Southern District of New York has issued an order granting provisional relief.

Three Arrows Capital is facing insolvency after being liquidated by its lenders.

The fund sustained significant losses during the collapse of the Terra ecosystem and faced further turmoil during a wider industry selloff.

In June, 3AC founders Su Zhu and Kyle Davies were reportedly figuring out how to repay their lenders and other counter-parties.

Adam Goldberg from Latham & Watkins represents Teneo’s Russel Crumpler and Christopher Farmer of Teneo in their attempts to coordinate the liquidation in the British Virgin Islands with stateside proceedings.

Farmer and Crumpler are senior managing directors at Teneo.

But amid these proceedings, the founders vanished.

A month passed with no communication from the founders, and court documents in the Chapter 15 proceedings showed that Davies and Zhu had “failed to cooperate” during the process.

Multiple failed attempts to reach Zhu and Davies led to today’s hearing, in which liquidators sought a motion to obtain discovery or more information about the state of 3AC.

And according to comments from Goldberg, firms entangled with 3AC’s turmoil want to share what they have, but they need a legal impetus to provide the information due to regulations and requirements.

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