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Teneo, the liquidators of failed hedge fund Three Arrows Capital (3AC), are reportedly trying to recover about $1.3 billion in funds from founders Su Zhu and Kyle Davis.
According to a June 27 Bloomberg report, the liquidators said Davis and Zhu incurred a $1.3 billion debt when 3AC was already insolvent, adding to creditors’ losses. 3AC is reported to owe $3.5 billion to creditors, making the founders’ potential liability more than a third of the total debt.
A Teneo spokesperson told Cointelegraph that the goal of raising $1.3 billion from the 3AC founders “broadly reflects” the June 27 lender presentation. At the time of publication, court documents did not contain this information.
The report was released exactly one year after a court in the British Virgin Islands ordered 3AC liquidated on June 27, 2022. In July 2022, the firm also filed for Chapter 15 in the United States Bankruptcy Court for the Southern District of New York.
While Davis and Zhu remained active on social media throughout the liquidation process, their physical whereabouts are virtually unknown. In June, the pair helped launch Open Exchange, a platform for trading claims against bankrupt crypto entities.
3AC is dead, long live 3AC Ventures https://t.co/61s8uQquOZ
— Kyle Davies (@KyleLDavies) June 21, 2023
Related: 3AC: $10 billion hedge fund fails, founders on the run
The liquidators’ lawyers in the US also tried to force Davis and Zhu to answer in court during the bankruptcy proceedings. Digital subpoenas were sent to both 3AC founders, and the legal team tried to charge Davis with contempt of court for “repeatedly breaching his obligations.”
Among the former assets of the founders of 3AC was a digital art collection auctioned by Sotheby’s. Artworks included in the collection, such as Dmitry Chernyak’s Goose, sold for $6.2 million in June.