3AC Seeks Contempt of Court Ruling on Founder Kyle Davies For Failing to Respond

Kyle Davies should be found in contempt of court for failing to respond to a subpoena for information about the collapse of Three Arrows Capital (3AC), documents filed by the bankrupt hedge fund’s estate Wednesday said.

The filing urges a New York court to impose a fine of $10,000 per day for wilfully ignoring previous requests, citing Davies’ lavish lifestyle and handsome profits from having run the company, whose bankruptcy in the middle of last year soon sent shockwaves across the crypto sector.

In March, Judge Martin Glenn ordered Davies to comply with a subpoena by April 13, as the court sought information on company assets, crypto, and records, but 3AC’s liquidators say he “fail[ed] to comply or respond in any way.”

“Davies’s failure to respond is not due to an inability to engage with the Court or any credible qualms with its jurisdiction,” the filing said. “It cannot be clearer that the Court can—and should— exercise personal jurisdiction over Davies, hold him in willful contempt of court, and impose sanctions.”

Though contempt is a civil offense, the filing suggests that the significant daily fine “is fair and likely meaningful in persuading Davies to respond.” It cites a recent interview with the New York Times in which Davies boasts of investing in a super yacht and potentially buying a private island.

Davies’ new venture, OPNX, for trading claims on bankrupt companies, was formally reprimanded by Dubai regulators, which said it was an unregistered exchange. A hearing will be held on the U.S. contempt request on Aug. 8.

Davies’ lawyers did not immediately respond to a request for comment.