Su Zhu breaks the silence of three arrows and accuses liquidators of playing dirty – The Defender

Su Zhu, co-founder of Three Arrows Capital, has been accused of working in bad faith against hedge fund liquidators, breaking a month-long silence during which his firm suffered a drastic collapse of grace.

“Unfortunately, our good faith in cooperating with the liquidators was filled with bait,” Zhu said. Wrote. The tweet included a screenshot of a pair of emails sent by his attorney Tennio’s liquidator Russell Krampler.

The last time Zhu tweeted or otherwise posted a public comment was on June 14, as rumors spread that his $ 10B fund was bankrupt. At the time, Sue mysteriously tweeted, “We are in the process of communicating with relevant parties and are fully committed to making it work.” Who those teams were and what “it” was was not said. But it didn’t take long for people to figure it out.

Ghosting Creditors

Since that tweet, Three Arrows has defaulted on a $ 700M loan, has been ordered terminated by a court, and Chapter 15 has been filed for bankruptcy. All the while, Zhu and co-founder Kyle Davis have gone into the dark, ignoring media inquiries and alleged ghostly lenders and even court-appointed liquidators, who have taken control of the fund.

Liquidators expressed their frustration in court documents filed Friday.

An “introductory zoom call” was arranged with Zhu and Davis, according to the document. “People who identified themselves as ‘Su Zhu’ and ‘Kyle’ were present on the zoom call,” but “their video was off and they were always silent and none of them were talking despite asking them questions directly.”

Teneo lawyers say the location of the co-founders is unknown and a Three Arrows office in Singapore was locked and empty during a visit in late June. Lawyers also warned of a “real and impending risk [Three Arrows’] Property may be transferred or disposed of by a party other than otherwise [Teneo] To the detriment of the borrower, his creditor and all other interested parties. “

In emails posted on Twitter on Tuesday, Zhu said Christopher Anand Daniel of Singapore-based Advocate Laws LLP said Sue and Davis were doing their best in the situation: the pair was “threatened with physical violence” and was running to answer questions from Singapore’s central bank. The month announced that it was “investigating Three Arrows in light of recent developments that raise questions about the adequacy of funding.”

In a separate email, Daniel took issue with the stewardship of the company’s liquidators.

Starkware Warrant

There was a claim of three arrows on tokens issued by crypto firm Starkware. Daniel complained that Tenio did not claim the token before the July 5 deadline, which resulted in “the company losing substantial value.”

Teneo and Daniel immediately responded to a request for comment.

Observers were left to guess why Tenio refused or failed to claim the token.

“A trade-off liquidator can reasonably believe that their goal is to recover what they have and not focus on getting a token at a start-up, but it is strange not to issue a warrant considering the strike price (the actual cost of 3AC) is low. Looks like? ” Wrote BuckyCantor, a self-described crypto lawyer.

Another observer gave a theory in response.

“I suspect this is because liquidators are not crypto native and are reluctant to drop the actual USD after the token, which may not be salable.” Wrote Twitter user Wasi Lear. “Their mandate is to liquidate; You don’t have to continue running 3AC as a business. “

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