A U.S. bankruptcy court has granted liquidators of defunct hedge fund Three Arrows Capital (3AC) permission to expand their claim against FTX ($0.00) to $1.53 billion, rejecting objections from FTX’s debtors that the move was untimely and unfair.
Judge John T. Dorsey of the U.S. Bankruptcy Court for the District of Delaware ruled on Thursday that 3AC’s liquidators had provided sufficient notice of their claim and were hampered in their investigation by FTX’s failure to share relevant records in a timely manner.
“The evidence suggests that the delay in filing the Amended Proof of Claim was, in large part, caused by the Debtors themselves,” Dorsey wrote in the decision.
FTX’s debtors, led by CEO John Ray III, meanwhile, objected to the amendment, arguing that it introduced new legal theories and significantly increased the claim’s size.
However, the court found that 3AC’s original filing had put FTX “on notice of the possibility of the later asserted claims,” dismissing the debtors’ objections.
Legal representatives for FTX debtors did not immediately respond to Decrypt’s request for comment.
3AC, once one of the most significant crypto hedge funds with over $3 billion in assets, collapsed in June 2022 following a sharp downturn in crypto markets.
The fund, founded by Kyle Davies and Su Zhu, had placed heavily leveraged bets on digital assets, including the TerraUSD stableco…
