- Chapter 15 bankruptcy prevents creditors from seizing a company’s assets.
- The 3AC liquidation reportedly reached at least $400 million.
The crypto hedge fund Three Arrows Capital (3AC) has filed for Chapter 15 bankruptcy in New York, a move that secures its US assets while a British Virgin Islands liquidation is undertaken. Chapter 15 bankruptcy is meant for insolvency cases involving multiple nations. Three Arrows is being defended by Latham & Watkins in the US bankruptcy.
3AC has just filed for chapter 15 bankruptcy ‼️
— Ash WSB (@ashwsbreal) July 2, 2022
A court ruling issued this week after 3AC defaulted on around $660 million loan to Voyager Digital would permit the foreign company to protect its domestic assets while the liquidation is carried out in the British Virgin Islands.
3AC is Continue struggle
Due to its insolvency, significant industry participants have been forced to reorganize their operations and restrict consumer withdrawals during a crypto selloff that appeared to take many huge companies off guard.
This week, Three Arrows Capital was ordered to be liquidated by a British Virgin Islands court. The fund, which was established by former Credit Suisse traders Zhu Su and Kyle Davies, handled $10 billion in assets as recently as March. On Monday, Voyager sent out a notice of default because 3AC not even paid any partial payments at all
Three Arrows Capital Ltd. and Russell Crumpler are the parties in the case, which is located in the Southern District of New York’s federal bankruptcy court (Manhattan). The British Virgin Islands function as the jurisdiction for the Three Arrows Fund.
If a firm is declared insolvent because it is unable to pay its debts, the Commercial Court issues an order for its liquidation. Many venture-backed crypto are experiencing difficulties as a result of the firm’s continuous downfall.
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