Three Arrows Capital's claim against FTX increases to US$1.53 billion

The United States Bankruptcy Court for the District of Delaware has allowed Three Arrows Capital Ltd to amend its claim in FTX's Chapter 11 bankruptcy.

Ogier's Dispute Resolution team in the British Virgin Islands is acting as lead and coordinating counsel for the liquidation of the former crypto hedge fund, advising the British Virgin Islands liquidators of Three Arrows Capital Ltd (3AC), Russell Crumpler and Christopher Farmer of Teneo, together with Latham & Watkins (led by Christopher Harris, Adam Goldberg and Tiffany Ikeda) in respect of 3AC's crucial BVI law claims against FTX.

Following the amendment, which was contested by FTX, 3AC's claim in FTX's estate increased from an amount FTX asserted was only US$120 million to US$1.53 billion.

In the Delaware ruling, Judge Dorsey held that 3AC's liquidators had ascertained that approximately US$1.53 billion of 3AC's assets, held on the FTX platform, were liquidated to satisfy liabilities to FTX of US$1.3 billion, a mere two weeks before the commencement of 3AC's liquidation.

Notably, the liquidators' motion to amend was filed after the bar date for claims in FTX's bankruptcy. In allowing the amendment after the bar date, Judge Dorsey identified exceptional circumstances in this case, finding that:

• the amended claim arose out of essentially the same facts as the original claim — namely the liquidation of 3AC's account on the FTX platform in satisfaction of a liability

• the "balance of the equities" was in favour of the amendment, in particular as the evidence suggested 3AC's liquidators had been diligent in attempting to obtain information, which was not available in time for the larger claim to be filed before the bar date

Judge Dorsey's decision significantly increases estimated recoveries for 3AC's estate, marking a major advancement for its creditors.