The liquidators claim 3AC Co-founders are located in Indonesia and the Emirates, where foreign court orders are difficult to enforce.
Judge Martin Glenn ruled on Dec. 2 during a virtual hearing for the Southern District of New York Bankruptcy Court that Three Arrows Capital (3AC) liquidators must provide more paperwork before he will allow them to summon the founders of the now-defunct cryptocurrency hedge fund through Twitter.
Zhu Su and Kyle Davies, the hedge fund’s founders, allegedly neglected to communicate with liquidators on numerous occasions during the previous few months, according to attorneys for the liquidators in the case.
According to a hearing presentation, “A communication mechanism was agreed upon between the Liquidators and Founders, but has not delivered adequate collaboration”.
The company’s founders, according to the liquidators, are situated in Indonesia and the United Arab Emirates, both of which have issues enforcing foreign court orders.
In addition, the founders had rejected service through their Singapore attorney, which prompted the liquidators to look for other ways to summon Su and Davies, according to a report from October 18.
The same day, Bloomberg reported that American officials were looking into potential legal transgressions by 3AC, including whether the hedge fund misled investors and neglected to register with the necessary authorities.
Judge Glenn brought up concerns regarding the founders’ citizenship and current whereabouts, citing problems with Rule 45, which allows parties to serve a non-party with a subpoena for the production of papers. He declared:
“From the court’s standpoint, it is relevant to the issue of servicing subpoenas on them. […] But under Rule 45, there is an issue whether this court could exercise personal jurisdiction over either of them. And citizenship does bear on that.”
The judge also noted that authorizing the issuance of a subpoena by an alternative service, such as Twitter, would be possible only if it is an “enforceable order.”
The NFTs were moved from addresses associated with Starry Night Capital, a fund established by the co-founders of the hedge fund, according to Teneo, the liquidation company in charge of the bankruptcy proceedings, which stated on October 5 that it has custody of them.
The company’s pre-appointment lawyers or Singaporean banks are said to have kept $35.6 million in fiat currencies that the liquidators claim to have taken custody of. A digital currency custody account controlled by the liquidators is also holding over 60 different types of tokens, which are periodically exchanged to US dollars.
