Three Arrows Capital Liquidation Update

Teneo, the advisory firm managing the liquidation of Three Arrows Capital (3AC), has initiated steps to take control of several of its assets, as revealed in a presentation obtained by The Block. This was shared during a court session in the New York Southern Bankruptcy Court, where Teneo outlined its progress in handling 3AC's assets. According to the presentation, liquidators have secured fiat currencies amounting to $35.6 million, held by Singaporean banks and the company's lawyers before their official appointment. Additionally, they have realized proceeds of $2.751 million from forced investment redemptions. During this process, Teneo has also claimed control over 3AC's Starkware tokens, having purchased them under original deal conditions. Notably, 3AC invested in Starkware's $75 million Series B and $50 million Series C funding rounds. Teneo currently manages 3AC's exchange accounts and has gathered transactional histories, identifying over 60 different types of tokens. The firm is safeguarding these recovered tokens in a crypto custody account, converting them to USD as needed, with Ether holdings exchanged at an average price of $1,810. In terms of extracting value, Teneo has identified approximately 180 simple agreements for future equity (SAFE) and simple agreements for future tokens (SAFT), in addition to various other equity investments by 3AC. However, it notes that many of these investments might be illiquid or come with restrictions like lock-ups. The presentation highlighted challenges in cooperation from 3AC founders Su Zhu and Kyle Davies, suggesting they remain uncooperative, only providing minimal asset disclosures. Reports indicate they might be located in Bali or the UAE, regions where enforcing foreign court orders can be difficult. Earlier in October, Teneo sought court permission to serve subpoenas to the founders via their social media and email, citing their lack of collaboration. Chief Judge Martin Glenn has approved a motion to subpoena them, although a decision on serving these subpoenas through Twitter remains pending. 3AC, formerly a leading crypto hedge fund, declared bankruptcy amidst liquidity challenges in June and filed for Chapter 15 bankruptcy protection in New York on July 1.