3AC liquidators file motion to hold Kyle Davies in contempt
Three Arrows Capital (3AC) co-founder Kyle Davies should be held in contempt of court for ignoring a subpoena connected to bankruptcy proceedings, June 14 court filings from 3AC's creditor council show. According to 3AC's creditor counsel, Davies is purposely delaying asset recovery from the former crypto hedge fund.
The civil sanctions against Davies for his contempt include an award of attorneys’ fees and a $10,000 daily fine until compliance. The motion does not apply to Su Zhu, the fellow co-founder of the bankrupt hedge fund. Due to his Singaporean citizenship, Zhu is not subject to the jurisdiction of the United States courts, Cointelegraph learned from Teneo, the firm serving as liquidator in the case.
On Jan. 5, Davies and Zhu were subpoenaed on Twitter for failing to engage in asset recovery after 3AC filed for Chapter 15 in July 2022. Since then, creditors have accused the founders of being “on the run” from the bankruptcy court.
The founders' whereabouts and legal jurisdictions play a significant role in recovery challenges. For instance, liquidators had to obtain permission from Singapore and U.S. authorities to subpoena Davies and Zhu via digital channels.
"The founders of Three Arrows, Kyle Livingstone Davies and Su Zhu [...] have repeatedly defied their obligations to the Court and failed to cooperate with the Foreign Representatives’ efforts to marshal the assets of the Debtor," reads the document. A hearing on the motion should take place in the coming weeks.
According to the liquidators, instead of complying with subpoenas and information requests, the "founders have ignored their obligations, hidden their whereabouts, and instead spent their time creating, amongst other things, a new venture to trade
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