Teneo, the liquidator handling the bankruptcy of hedge fund Three Arrows Capital (3AC), is reportedly aiming to recover approximately $1.3 billion from the fund's founders, Su Zhu and Kyle Davis. According to Bloomberg's report on June 27. Davies and Zhu accumulated $1. 3 billion in debt when 3AC was already insolvent, exacerbating the losses for creditors. The total debt owed by 3AC is said to amount to $3.5 billion, making the potential liability of the founders more than a third of the total debt.
A spokesperson from Teneo stated that the $1.3 billion target sought from the 3AC founders aligns with the creditor presentation made on June 27. However, this information does not appear to be included in the court documents at the time of publication. The court ruling that ordered 3AC into liquidation took place in the British Virgin Islands on June 27. 2022. and the company subsequently filed for Chapter 15 bankruptcy with the US Bankruptcy Court for the Southern District of New York in July 2022.
Despite the ongoing liquidation proceedings, Davis and Zhu have remained active on social media, but their physical whereabouts remain largely unknown. In June, they were involved in the launch of Open Exchange, a platform for trading claims against bankrupt cryptocurrency entities. Lawyers representing the US liquidators are attempting to compel Davis and Zhu to testify during the bankruptcy proceedings. Both founders have received digital subpoenas, and the legal team is seeking to hold Davis in contest of court for repeatedly neglecting his obligations.
In terms of the founders' former assets, one notable item was a digital art collection auctioned by Sotheby's. Among the collection was Dmitri Cherniak's artwork "The Goose," which sold for $6.2 million in June.
