- Kyle Davis again failed to appear in court in the 3AC hedge fund collapse case.
- The former company executive said he is not a U.S. citizen.
- The liquidators of 3AC are demanding that Davis be found in contempt of court.
The co-founder of hedge fund Three Arrows Capital (3AC), Kyle Davis, has rejected the jurisdiction of the bankruptcy court. He claims he is no longer a U.S. citizen, The Block reports.
On Aug. 1, Davis filed a related petition in U.S. Bankruptcy Court. As evidence, he provided notarized copies of his renunciation of United States citizenship on December 15, 2020.
The 3AC co-founder said he married a Singaporean citizen in 2017 and obtained a residency permit. Since the Asian country’s laws do not allow dual citizenship, Kyle Davis has decided to revoke his U.S. passport.
The move comes after several attempts to hold the hedge fund’s co-founders accountable. In January, Davis and another top 3AC executive, Soo Joo, were subpoenaed to appear in court for the company’s collapse but ignored the subpoenas.
The fund’s liquidators’ lawyers are now asking that Kyle be found in contempt of court, fined $10,000 and ordered to pay court costs.
Lawyers representing 3AC said it was impossible to serve the document because their client is no longer a U.S. citizen. There is a special rule regarding subpoenas in bankruptcy cases “that does not allow them to be served on persons outside the United States unless they are citizens of the country”. The document was sent to Kyle Davis’ Singaporean lawyer, not hand-delivered, so it has no legal effect, the defense says.
The country’s financial regulators and criminal prosecutors can take enforcement action against foreign nationals. But provided they committed crimes on U.S. soil, against U.S. citizens or organizations.
The next hearing on the motion is scheduled for Aug. 8. Who will represent the 3AC side is not yet known. In June 2022, a British court ordered the liquidation of the 3AC fund and its assets. Due to the market collapse, the company was unable to replenish the deposits of creditors, which led to its insolvency.