Court Approves Three Arrows Capital’s $1.53 Billion Claim Against FTX

The Delaware bankruptcy court has approved Three Arrows Capital's (3AC) petition to increase its claim against the FTX estate from $120 million to $1.53 billion. This significant amendment follows the discovery of evidence indicating that FTX liquidated $1.53 billion in 3AC’s assets just weeks before 3AC began its own liquidation in 2022.

Key points include:

• 3AC originally claimed $120 million in July 2023 after FTX's insolvency.
• The new claim is based on allegations that FTX liquidated assets to cover a $1.3 billion liability, which the court found insufficiently substantiated.
• The ruling allows 3AC to potentially reshape creditor payouts in FTX's ongoing bankruptcy process.
• FTX argues that the expanded claim complicates its reorganization plan and should have been submitted earlier.
• Insufficient cooperation from 3AC’s founders contributed to the delay in uncovering the full extent of the claim.

The decision raises questions about the impact on distributions to other creditors and highlights transparency issues within both FTX and 3AC as they navigate bankruptcy proceedings.