3AC’s Claims Soar: From Pennies to Billions in FTX’s Bankruptcy Circus! 🎪💰

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In a most theatrical twist of fate, the United States Bankruptcy Court for the District of Delaware, that grand stage of financial drama, has granted a motion that allows the joint liquidators of Three Arrows Capital (3AC) to amend their original proof of claim in the FTX bankruptcy proceedings. Lo and behold, their claims have ballooned from a mere $120 million to a staggering $1.53 billion! 🎉

Ah, but the plot thickens! The amended filing has broadened 3AC’s allegations against FTX to include a veritable buffet of grievances: breach of contract, breach of fiduciary duty, unjust enrichment, and proprietary restitutionary claims. One might say it’s a veritable smorgasbord of legal accusations!

3AC’s Liquidators: The Unsung Heroes of the FTX Saga

Our protagonists, the liquidators Russell Crumpler and Christopher Farmer, have secured a major victory in this courtroom drama. For context, these brave souls initially filed their proof of claim back in June 2023, seeking to recover funds related to preference, conversion, and other avoidance actions tied to a $120 million loan that 3AC allegedly owed to FTX. But, as they say, the devil is in the details, and further investigation revealed that 3AC’s dealings with FTX were far more extensive than a mere loan.

“The information obtained by the Liquidators in the year since they filed their Original POC led them to the new conclusion that just two weeks before the commencement of the 3AC Liquidation, the $1.53 billion of assets that 3AC had on the FTX platform were liquidated to satisfy $1.3 billion in liabilities to FTX,” the document read. A classic case of “oops, we did it again!”

But wait, there’s more! According to court documents, our intrepid liquidators faced substantial obstacles during their investigation. A lack of proper records from 3AC? Check. Minimal cooperation from the company’s founders, Kyle Davies and Su Zhu? Double check. Delays in receiving critical documents? Oh, you betcha! Much of the key information was only made available in late 2023 and early 2024, after FTX itself had filed for bankruptcy in November 2022, collapsing under the weight of fraud and mismanagement, courtesy of the former CEO, Sam Bankman-Fried. Talk about a tangled web! 🕸️

This delay, dear reader, prevented the liquidators from fully grasping the scope of 3AC’s transactions with FTX until after the original claims deadline had passed. A real nail-biter!

“The evidence makes clear that the description of the facts contained in the Original POC was based on the limited information that the Liquidators had available to them at that time,” Judge John T. Dorsey wrote, perhaps with a hint of exasperation.

Meanwhile, FTX, in a fit of indignation, objected to the motion, arguing that the amendment was filed too late and expanded the scope of the claims, thus violating the sacred bankruptcy process. They claimed that the original proof of claim did not provide sufficient notice of the nature or the amount of the newly proposed claims. Oh, the audacity!

However, the court, in a twist worthy of a Shakespearean play, dismissed FTX’s objections, siding with 3AC’s liquidators and approving the expanded claim. The court found that much of the delay in filing the amended claim was attributable to FTX’s failure to provide the necessary documents to the liquidators promptly. A classic case of “you snooze, you lose!”

“Having considered all the evidence presented, I find that the balance of the equities is in favor of allowing the Amended POC,” Judge Dorsey noted, perhaps with a smirk.

And as if this saga couldn’t get any juicier, this latest development occurs alongside Bankman-Fried’s ongoing efforts to secure a pardon from President Donald Trump. To strengthen his case, he has sought to align himself with right-wing figures. He recently graced Tucker Carlson’s show with his presence and has reportedly consulted with a lawyer linked to Trump. Despite Trump’s history of pardons, skepticism remains due to SBF’s lack of support in the crypto community. Ah, the irony! 🤷‍♂️

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2025-03-14 10:10