Three Arrows Capital files for bankruptcy

On Friday the struggling Venture Firm 3 Arrows Capital (3AC) officially filed for Chapter 15 bankruptcy, in an attempt to protect its US assets while its liquidation is carried out in the British Virgin Islands, following a court order from the previous week.

As Bloomberg reported, the case is Three Arrows Capital Ltd and Russell Crumpler, 22-10920, U.S. Bankruptcy Court for the Southern District of New York (Manhattan). The liquidation ordered by the British Virgin Islands court comes after the company’s inability to pay off debt and other financial obligations following a notice of default issued by Voyager, the previous Monday.

Earlier, The Monetary Authority of Singapore (MAS), where 3AC was based, issued a notice that the company has provided the regulator with “false information” after opening an entity in the British Virgin Islands. According to the MAS, the Venture Firm “novated the management of its fund to an unrelated offshore entity” however, this was seen as “misleading” since Su Zhu – one of the co-founders of the company was also a shareholder in the fund. The agency also reprimanded 3AC for not notifying the regulator of changes in the “directorships and shareholdings of its directors” as well as exceeding the maximum allowable sum that the fund could manage, from July 2020 to September 2020 and from November 2020 to August 2021, when 3AC exceeded its $250 million assets under management limit.