3AC’s Zhu and Davies To Skip Liquidators’ Court Hearing, Email Shows

Lawyers for the fund’s creditors allege neither co-founder has cooperated with them in any meaningful manner

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Three Arrows Capital

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key takeaways

  • The co-founders were set to attend a virtual court hearing on Tuesday, but they aren’t expected to show up
  • Zhu referred to as-yet-unnanounced token from Starkware that 3AC was in line to receive

Three Arrows Capital’s co-founders Su Zhu and Kyle Davies are still not ready to oblige the fund’s liquidators after being accused of not cooperating with them meaningfully.

Zhu expressed annoyance in a tweet Tuesday that included screenshots of his lawyer’s emails to Russell Crumpler, a Three Arrows Capital (3AC) liquidator. The co-founder provided the update about a month after acknowledging that the crypto hedge fund was in trouble.

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Christopher Anand Daniel, a managing partner at Singapore-based law firm Advocatus, claimed in the email that Crumpler was “baiting” Zhu and Davies by informing a US court about their alleged non-cooperation.

“This is highly disappointing, and our clients will take such steps as are necessary to seek the appropriate sanctions,” Daniel wrote.

Lawyers acting on behalf of the fund’s creditors want to freeze 3AC’s assets as part of the liquidation process it was recently ordered into. But they aren’t ready to just yet without getting the full picture of the fund’s bank accounts, derivatives contracts and other records.

Those lawyers allege both co-founders haven’t begun to cooperate with them in any meaningful manner, saying they were both mute with videos turned off on a July 8 Zoom call. 

In a move to explain why his clients have been preoccupied, Daniel alleged that the co-founders and their families have received “threats of physical violence” and had to handle queries from the Monetary Authority of Singapore in the last week.

He said a spreadsheet detailing 3AC’s assets was attached to the email, adding that Zhu and Davies are working to provide more documents “on a rolling basis.” 

A US court had set a hearing for Tuesday, July 12 at 9 am ET (9 pm in Singapore) via video conference, according to an emergency motion filed in New York last week. But it appears the co-founders won’t be attending that call, according to Daniel’s email.

“In light of the foregoing, our clients will not be proceeding with the call this evening, Singapore time,” he wrote. “Depending on your response, we will let you know when our clients can reasonably be expected to speak with you.”

In a separate email, Daniel accused the liquidators of failing to exercise a StarkWare token offer by July 5 that had been agreed upon. He said this omission “caused the company to lose substantial value.” 3AC has invested in the Ethereum layer-2 developer StarkWare, according to its website, but a token for the protocol has not yet been released.

Davies has been subpoenaed to provide testimony and submit documents via video conference on July 19.


Update on July 12, 2022, at 11:45 am ET: Judge Martin Glenn ordered that 3AC’s assets in the US should not be transferred or disposed of and also authorized the Foreign Representatives to issue subpoenas in the course of their investigation.


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