In a recent report, Teneo liquidators in charge of liquidating the collapsed Three Arrows Capital crypto hedge funds have told 3AC creditors that the recovery rate of the fallen firm is estimated at 45.74%. They added that the firm has about $563 million in tokens that can be liquidated within the next three years.
In addition, the report noted that Su Zhu, the co-founder of 3AC, is currently under arrest after his arrest in Singapore, and completing his sentence yesterday. According to the report, Teneo’s joint liquidators, Russell Crumpler and Christopher Farmer, who are both in charge of liquidating collapsed 3AC’s assets, have told the creditors of the failed crypto hedge fund that they can only receive about 45.74% of their claims on the firm during the first set of distributions planned to take place in the first quarter of 2024.
Creditors To Receive 45.74% Of Their Claims
Furthermore, the liquidators revealed in their report that 3AC crypto hedge funds have a collection of illiquid assets with an estimated worth of about $1.6 billion as accounted for on December 18. However, the total capital claims made by creditors of 3AC were estimated at 2.7 billion.
Also, Teneo stated that it has resolved legal cases against many involved parties such as BlockFi, Genesis, and DCG, boosting the failed firm’s assets by a whopping $292 million. More so, the BlockFi settlement still awaits approval. Explaining further, the liquidators reported that a total of 154 claims were made against the failed 3AC estate which amounts to about $3.4 billion.
About $200 million of the lot was reportedly not approved for distribution while the liquidators rejected about $322 million of the claims. Also, about $76 million of the claims are controversial.
Details Of 3AC Assets In Liquidators’ Possession
In addition, the report said that the major part of the assets in the liquidators’ possession is the illiquid assets which are subjected to vesting periods. According to the assets breakdown, only 6% is liquid, 82% are illiquid assets, while investments and equity make up about 6.9% and cash takes up 4.8%.
Additionally, the illiquid assets are reportedly in 13 separate digital assets with a cumulative value of $563 million. These assets are going to be unlocked during different vesting periods with about $50 million to be released quarterly till the end of 2026. According to the estimate, about $200 million of the assets would be liquefied at the end of 2024.
Furthermore, reports revealed that the liquidators have staked a portion of the tokens and about $5.4 million in staking rewards had been realized by the investment exercise. More so, the cash holdings have raised about $1 million in interest settlement. Generally, the liquidators have converted 3AC’s liquid tokens and non-fungible tokens to cash and about $34.5 million in liquid tokens and $15 million in NFTs had been sold by the liquidators. In total, they have successfully raised about $66 million in asset sales, according to reports.
3AC Has About $1.1 Billion In Freezing Assets
According to Teneo liquidators’ report, about $1.1 billion in assets owned by 3AC founders Kyle Davies and Su Zhu were frozen by a British Virgin Islands court. Also, Teneo had filed a court case for insolvent trading for about $1.08 billion against the duo founders with another claim filed against Kyle Davies and his wife, Chen, amounting to about $66 million and $4.6 million each.
Meanwhile, Su Zhu was reportedly apprehended on September 29 in Singapore and sentenced to a four-month jail term. On the 28th of November, he was allowed to continue his jail term under house arrest and was eventually released on December 20 after serving ⅔ of his sentence. On the other hand, liquidators revealed that Kyle Davies’ whereabouts are known but he is yet to cooperate meaningfully with the ongoing investigation and has not obeyed the custodial sentence mandated by the court against him.
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