- Three Arrows Capital founders Zhu Su and Klye Davies “have not yet begun to cooperate” with lawyers for creditors
- The pair were on a Zoom hearing but their whereabouts are “unknown”
- Creditors are seeking to make sure they are high on the list for bankruptcy payouts
The founders of collapsed hedge fund Three Arrows Capital are not yet cooperating with the legal representatives of its creditors and the whereabouts of its founders remain “unknown”, according to a recent court filing. Kyle Davies and Zhu Su, who founded Three Arrows Capital in 2012, but the hedge fund collapsed spectacularly 10 years later after failing to repay hundreds of millions in loaned assets, helping to spread the ‘crypto contagion’ that has contributed towards crypto companies like Voyager Digital going under. Su promised in a June tweet that the company was “communicating with relevant parties” and was “fully committed to working this out”, a stance that seems to have changed in the last month.
Founders “Have Not Yet Begun to Cooperate”
The filing in question is not a lawsuit against Three Arrows Capital but is instead an attempt by a number of unnamed investors to be recognised as chief creditors in the ongoing bankruptcy proceedings. The request was filed on July 1st, with U.S. law firm Latham and Watkins standing for the “foregin representatives”, and a recent update revealed that Su’s promise that he and Davies were “fully committed” to working out the issues with Three Arrows Capital and its creditors was not quite living up to his promise:
— db (@tier10k) July 11, 2022
The filing reveals that the physical whereabouts of Su and Davies are “currently unknown” and that, more importantly, the pair “have not yet begun to cooperate with the Foreign Representatives in any meaningful manner.” It adds that the plaintiffs’ legal team are trying their best to resolve the issues at hand but that they have been “frustrated by this lack of cooperation to date.”
Zhu and Davies Considered Flight Risk by Creditors
The filing adds that there is an “actual and imminent risk” that Davies and Su could flee with their personal crypto holdings, and may never face up to their negligent acts. This is in stark contrast to a tweet from Su from mid-June:
We are in the process of communicating with relevant parties and fully committed to working this out
— Zhu Su 🔺 (@zhusu) June 15, 2022
A Zoom call between the parties in the matter was held recently, and two people by the names ‘Su Zhu’ and ‘Kyle’ were present, but “their video was turned off and they were on mute at all times with neither of them speaking despite questions being posed to them directly.”
Clearly, rather than saying that Davies and Zhu aren’t going quietly we can say that they are in fact going absolutely silently.
