Three Arrows Capital founder accuses liquidators of 'baiting' a day after reports said the hedge fund execs were not cooperating in bankruptcy proceedings

• Three Arrows Capital founder Zhu Su tweeted that liquidators were "baiting" the founders of the bankrupt hedge fund.
• Su tweeted the accusation a day after reports said the firm was not cooperating.

Three Arrows Capital founder Zhu Su on Tuesday responded to reports that he and his co-founder, Kyle Davies, weren't cooperating with liquidators in bankruptcy proceedings.

The founders of the now defunct crypto hedge fund were said to be avoiding contact with creditors and their physical whereabouts were unknown. In a tweet on Tuesday morning, Su posted a screenshot of a communication from the firm's lawyers that appeared to accuse liquidators of "baiting" Three Arrows' executives into good faith negotiations when they had already referred the case to a US bankruptcy court.

"Sadly, our good faith to cooperate with the Liquidators was met with baiting," Su tweeted. He attached screenshots of two email exchanges between Teneo, the advisory firm expected to advise on the liquidation of the hedge fund's remaining assets, and Advocatus Law, which is representing Three Arrows.

"It now appears clear why your Singapore solicitors were keen to ask if the discussions were a 'without prejudice' basis," Advocatus wrote. "It was to use the discussions in Court filings without notice to our clients."

The email refers to Teneo's claim that Davies and Su had not given "meaningful cooperation" in bankruptcy proceedings, adding that the hedge fund's founders could not be found at their office and were not responsive in a Zoom call scheduled last week.

In response, the email asked liquidators to acknowledge they were previously told Davies and Su had been receiving "threats of physical violence" and "have been working under a lot of time pressure."

The email also said that a spreadsheet listing Three Arrows' assets was attached, as liquidators had previously requested a subpoena be issued for Davies and Su in order to access information on the firm's holdings, records, and other financial details.

Another email screenshotted by Su accused Teneo of causing Three Arrows to "lose substantial value," as the advisory firm had ignored a purchase offer from StarkWare, a blockchain startup based in Israel.

"The Liquidators' conduct on the StarkWare Exercise may constitute a breach of their duties," Advocatus said, asking liquidators to confirm details of the purchase offer.

The emails from Advocatus added that Davies and Su would not be attending a call scheduled with Teneo for Tuesday evening. Davies and Su were also not in attendance at the emergency court hearing today, Reuters reported, during which Teneo was granted official access to the crypto hedge fund's US assets.

"We will let you know when our clients can reasonably be expected to speak with you," the email from Advocatus said.