The co-founders of the bungled crypto lending firm Three Arrows Capital (3AC), Zhu Su, and Kyle Davies appear to be on the run from creditors, according to court documents recently filed in New York. Lawyers representing the creditors say the physical whereabouts of Zhu Su and Kyle Davies, are “currently unknown,” ahead of a hearing that is scheduled to discuss the next steps in the liquidation process.

The documents, filed on Friday evening, also allege that the founders have not yet begun to cooperate with the liquidation process “in any meaningful manner.” On Monday, lawyers requested the court keep the identity of the creditors anonymous.

Discussions around their whereabouts made rounds on Tweeter with a user Amy Castor asking “Where in the world are 3AC founders Su Zhu and Kyle Davies?” Amy’s had retweeted Zhu Su’s Tweet in which he appeared to explain the reasons for their disappearance saying “our good faith to cooperate with the Liquidators was met with baiting.”

Three Arrows Capital( 3AC), managed about $10 billion in assets as recently as March. On July 1, the firm filed for Chapter 15 bankruptcy protection from U.S. creditors in the Southern District of New York, after a plunge in cryptocurrencies and the collapse of the TerraUSD (UST) stablecoin project wiped out its assets.

The 3AC was placed in liquidation on June 27 following a court order of the Eastern Caribbean Supreme Court in the British Virgin Islands(BVI’s) High court of Justice. According to the court order, Teneo was appointed to handle the liquidation of the Three Arrows Capital.

Another law firm Ogier has been appointed to guide and advise Teneo. Ogier which is the main joint liquidator with Russell Crumpler and Christopher Farmer of Teneo (BVI) Limited has also revealed the date for the meeting last week which is set to be the 18th of July.

According to Ogier, Teneo has created a dedicated website for creditors to update them and the public on the latest developments around the 3AC’s liquidation process. The details of the first meeting will be available on this website.

According to July 8’s court filing, Zhu and Davies, both former traders for Credit Suisse, were to participate in an introductory Zoom call last week to discuss basic steps to preserve their assets. Neither founder turned on his video, and both remained muted for the duration, with all dialogue conducted through counsel. Their lawyers said at the time that they “intended to cooperate.”

Zhu Su has broken his silence through a Twitter post with two letters from his legal team at Advocatus Law LLP. The letter was addressed to Russell Crumpler, Teneo’s accountant assigned to help recover the missing billion.

Teneo’s Russell Crumpler, who was tasked with helping to facilitate the bankruptcy process, said in a sworn statement that there is a “real risk” that 3AC’s assets would disappear asking “immediate authority to pursue discovery.”

The Broader Impact of the 3AC Liquidation

As many creditors are trying to determine what assets are remaining in the 3AC treasury, their efforts might be in vain as the representatives helping to facilitate the liquidation requested immediate access to 3AC’s offices and to information related to their bank accounts and digital wallets, which had not been granted as of Friday during a meeting according to the filing says.

In late June, the fund’s liquidators arrived at the 3AC Singapore offices in an attempt to meet with the founders but the offices appeared vacant except for a number of inactive computer screens.

Nevertheless, Russell Crumpler said in his statement:

That risk is heightened because a substantial portion of the Debtor’s assets is comprised of cash and digital assets, such as cryptocurrencies and non-fungible tokens, that are readily transferrable.’’

Many institutions had money wrapped up with the firm leading to creditors requesting the court in Friday’s filling to suspend 3AC’s right to transfer or dispose of any assets. Attorneys are also asking that the court orders the founders or others who may have information about 3AC’s assets to provide the required information.

The first meeting of the Three Arrows Capital creditors is set to take place on July 18, according to the Block. It is not clearly stated yet whether the meeting will be live-streamed publicly.

The specific agenda of the meeting is not clear but through a trusted source, the Block said that Teneo could establish a creditor board representing 3AC creditors and announce the progress of the liquidation process in the meeting.

Digital asset brokerage Voyager Digital filed for Chapter 11 bankruptcy protection after 3AC couldn’t pay back around $670 million it had borrowed from the company. The United States-based crypto lenders Genesis and BlockFi, crypto derivatives platform BitMEX and crypto exchange FTX are also being hit with losses.

Correction – this post has been updated to remove an incorrect picture of Kyle Davies.

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