3AC Liquidators Accuse Co-Founder Kyle Davies of Negligence and Non-Compliance with Subpoena
Liquidators of the defunct hedge fund Three Arrows Capital (3AC) have urged a judge to impose a daily fine of $10,000 on co-founder Kyle Davies. The request comes as Davies is accused of non-cooperation with the investigation into the firm’s collapse, impeding the liquidators’ efforts to unwind 3AC’s operations. The fine is seen as a means to incentivize compliance and facilitate the progress of the investigation.
The lawyers representing the 3AC liquidators emphasized that the proposed fine against co-founder Kyle Davies is justified due to his lack of response to a subpoena for over five months. New York bankruptcy court Judge Martin Glenn has warned that Davies is potentially exposing himself to being held in contempt of court for his refusal to comply with the subpoena. This context underscores the seriousness of the situation and the legal consequences Davies may face if he continues to disregard the court’s directives.
In their efforts to obtain crucial information, the liquidators of 3AC have resorted to unconventional methods. They have sought permission from Glenn, one of the co-founders, to issue a subpoena to Kyle Davies via Twitter, as he frequently posts on the platform. The liquidators assert that the proposed $10,000 daily fine is a reasonable measure that will likely compel Davies to respond. This approach highlights the liquidators’ determination to secure the necessary cooperation and information from the co-founders to facilitate the proceedings.
The liquidators have encountered difficulty in determining the current whereabouts of both Kyle Davies and Su Zhu, the co-founders of 3AC. They cited an article published in The New York Times on June 9, which mentioned that Davies had traveled to Bali following the collapse of 3AC. This information provides some insight into Davies’ potential location, but the liquidators are still faced with the challenge of locating both co-founders in order to proceed with the necessary legal actions.
Lack of Remorse Seen in 3AC Founder
3AC liquidator Russell Crumpler, in a sworn statement, highlighted that Kyle Davies has displayed a lack of remorse concerning the fund’s collapse, despite being indebted to creditors with a substantial sum of $3 billion. Crumpler further expressed his perspective, based on his experience as a liquidator, that Davies’ actions and public statements reinforce his disregard for court orders and his responsibilities towards the Debtor’s estate. This statement underscores the liquidator’s concerns regarding Davies’ behavior and his perceived noncompliance with legal obligations.
Lawyers representing Kyle Davies and Su Zhu did not provide a response when asked for comment on Thursday. The liquidators shared an email exchange with the court, in which the lawyers asserted that the court orders obtained by the liquidators lacked merit. They contended that their clients, who are currently outside the United States, are not subject to the jurisdiction of US courts. This stance reflects the legal argument put forth by Davies and Zhu’s legal representation regarding the applicability of the court’s jurisdiction in their specific circumstances.
Judge Glenn had previously expressed that the liquidators presented compelling evidence indicating that Kyle Davies remains subject to the court’s jurisdiction, despite no longer residing in the United States. The liquidators argued that Davies, who was born in the US, and the company Three Arrows (3AC) initially originated in Delaware and conducted operations in California before ultimately incorporating in the British Virgin Islands. This information was affirmed in a ruling issued in March, supporting the assertion that the court retains jurisdiction over Davies and the case involving 3AC.
Also Read: BlockFi shuts down lending operations
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
Follow Cryptos Headlines on Google News
Join Cryptos Headlines Community