3AC bankruptcy process faces challenges amid unknown whereabouts of founders
Liquidators for Three Arrows Capital (3AC) will have to present further documents to grant the permission to subpoena the now-bankrupt crypto hedge fund's founders through Twitter, according to a decision from judge Martin Glenn during a virtual hearing for the Southern District of New York Bankruptcy Court on Dec. 2.
Lawyers representing the liquidators in the process claimed that Zhu Su and Kyle Davies, founders of the hedge fund, repeatedly failed to engage with liquidators in the past months. "A communication protocol was agreed between the Liquidators and Founders, but has not yielded satisfactory cooperation," according to a hearing presentation.
Liquidators claimed the founders of the company are located in Indonesia and the Emirates, which have difficulty enforcing foreign court orders.
The founders had also refused to accept service through their Singapore counsel, which led the liquidators to seek alternative means to subpoena Su and Davies, Cointelegraph reported on Oct. 18. On the same day, Bloomberg disclosed that U.S. regulators were launching a probe into possible legal violations by 3AC, on whether the hedge fund misled investors and failed to register with the appropriate agencies.
Judge Glenn raised questions about the citizenship and current location of the founders, mentioning issues under Rule 45, which permits parties to serve a non-party with a subpoena for production of documents. He stated:
The judge also noted that authorizing the issuance of a subpoena by an alternative service, such as Twitter, would be possible only if it is an "enforceable order."
Related: Legal team for 3AC liquidators blast founders for shifting blame to FTX, media blitz amid bankruptcy
Teneo, the liquidation firm in charge of
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