Three Arrows Capital Liquidators Demand $1.3B from Bankrupt VC Fund’s Co-Founders

Teneo, the court-appointed liquidators of bankrupt enterprise fund Three Arrows Capital (3AC) are claiming $1.3 billion from its co-founders, Su Zhu and Kyle Davies.

Citing a supply aware of the liquidators’ claims, Bloomberg reported that Teneo sought the quantity from the founders to cowl losses incurred within the final couple of months earlier than the fund’s collapse in July 2022 after it took on “important leverage.”

Decrypt has reached out to Teneo for remark and can replace this text ought to we obtain a response.

The liquidators reportedly met with the hedge fund’s collectors on Tuesday to debate the allegations in opposition to 3AC’s co-founders. They declare that Zhu and Davies continued taking up leverage in Might and June of 2022 regardless of the agency being “already bancrupt,” which elevated the full losses.

Till now, the liquidators had secured property that belonged to the corporate, together with $35.6 million money held in financial institution accounts, a $30 million yacht, and sure NFTs.

Nonetheless, these characterize a small portion of the $3.5 billion gap within the firm’s stability sheet revealed on the time of chapter.

The newest $1.3 billion declare by the liquidators will look to grab property owned by Zhu and Davies personally.

In a July 2022 interview, 3AC’s founders attributed the hedge fund’s collapse to over-exposure to Terra, staked Ethereum, and Grayscale’s Bitcoin belief.

Zhu and Davies lately tried to stage a comeback with a brand new enterprise capital fund 3AC Ventures, revealing investments in initiatives together with chapter declare change Open Change (OPNX).