Thread by @DrSoldmanGachs

It's time for an update regarding the #3ACliquidation process. The liquidators presented its first report to the creditors of Three Arrow Capital, Ltd ("3AC") on August 25. This is a summary of the key takeaways from the report plus some personal reflections 🧵

https://twitter.com/DrSoldmanGachs/status/1549236861138538496

Based on the most recent register of directors of 3AC dated 28 June 2022, @zhusu and @KyleLDavies are the current directors. Someone called Mark James Dubois curiously resigned on 24 June 2022. Who is he?

The shareholders of 3AC are the Three Arrows Fund feeder vehicles plus additional feeder vehicles for other "strategies" which include @DeFianceCapital, @StarryNight_Cap and Three Arrows Class Warbler. Who is behind the Warbler vehicle and what purpose did it play?

The liquidators sent notices of their appointment to 3AC's legal advisors, banks in Singapore and the US, the Company's fund administrator, crypto exchanges, as well as any other parties whom the liquidators believed may hold info relevant to the operations of 3AC

3AC's administrator is @ASCENTFUNDAFS, who resigned without notice to investors (which is required under any standard fund administration agreement) and therefore a clear violation of their fiduciary responsibilities. They have applied to be creditors, presumably for unpaid fees

The liquidators also advertised their appointment in 8 major newspapers in early July including the Financial Times, Wall Street Journal, and the Business Times in Singapore. This ad disclosed their appointment and invited creditors to submit claims

The liquidators are disappointed over the poor level of cooperation from @zhusu and @KyleLDavies and suspect that the asset list provided to them for 3AC is not complete. The liquidators therefore must work on recreating the books and records of the company

3AC's last available NAV on 31 Jan 2022 showed assets of $5.1bn, liabilities of $3.6bn, resulting in an NAV of $1.5bn. In the asset list received from the Directors in mid-July 2022, the total value of assets was approx $1bn, down 80% since Jan.

Included in the assets were deposits in multiple bank accounts, assets on 18 centralized exchanges and with 1 custodian, 200+ equity, SAFT, and other agreements, 60+ crypto tokens, and 1000+ NFTs

3AC operated 3 separate sub-portfolios, known as @DeFianceCapital, @StarryNight_Cap, and "Warbler". These sub-portfolios were controlled by third parties like @Arthur_0x and @Vince_Van_Dough. The legal status of these sub-portfolios is still under review.

Re @DeFianceCapital, details have been provided for the assets it holds and some assets have been transferred to the liquidators. However certain illiquid assets (SAFEs and SAFTs) are subject to vesting and cannot be transferred without potential breach of agreements in place

@DeFianceCapital purports that some of its assets are being held for its own benefit but has yet to provide evidence to this effect. This will likely become a sticky situation and raise questions re the appropriate waterfall to apply for claims and which assets are protected

As of the 31 January 2022 NAV, the @DeFianceCapital portfolio had a market value of $215 million versus cost of $56 million. There is no available estimate as of present day

The liquidators are aware of numerous @StarryNight_Cap wallets holding more than 1000 NFTs. These wallets are being monitored closely to ensure there are no movements. Correspondence is ongoing with @Vince_Van_Dough to arrange transfer of control.

Curiously @Vince_Van_Dough has completed ghosted all @StarryNight_Cap investors and in his last communication in July had suggested that the wallets were not in his control. This contradicts the liquidator's report.

The liquidators are exploring options on how best to liquidate the @StarryNight_Cap portfolio including the best strategies for maximizing value. As of 31 Jan 2022, the portfolio had a value of $58 million, versus cost of $59 million. Clearly it is worth a lot less today

3AC has a portfolio by the name of Warbler. The liquidators have not been able to contact the manager of this portfolio and all requests have gone unanswered. The directors have also ignored requests for more details. The 31 Jan 2022 NAV for Warbler was $16 million. Slush fund?

The liquidators have identified 60+ crypto tokens in 3AC wallets, with an estimated value of $219 million, as of 23 Aug 2022. A large number of these tokens are subject to lockup periods and/or staking arrangements, with some lock-up periods being as long as 5 years.

The liquidators have struggled to gain control of the wallets holding these crypto tokens and various counterparties have not cooperated with the liquidators to date. Many of these tokens are being held in sub-portfolios like @DeFianceCapital and are the subject of dispute

The liquidators have identified 66 SAFE, SAFT and equity investments disclosed by @zhusu and @KyleLDavies, and a further 130+ potential investments from info received from investigations. Su and Kyle claim that these investments are worth $900m but the liquidators are skeptical

The liquidators have no intention to conduct a fire-sale of any of the 3AC assets. Many parties have reached out to register their interest to acquire certain assets.

Sadly the creditor's report does not show material progress mainly due to Kyle and Su's unwillingness to come clean. The liquidators need more time to unravel the 3AC house of cards, and only then are they able to realize value for the benefit of the creditors

So far the only winners seem to be the liquidators and the legal advisors who have charged $3.1 million for the period 24 June 2022 - 31 July 2022. The total amount of funds recovered by the liquidators so far and in their control is a grand total of $4.3 million (only).

If anyone has any information regarding funds that Kyle and Su have squirreled away, please help out and send information to [e-mail]