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Liquidators of Three Arrows Capital want a judge to fine co-founder Kyle Davies $10,000 per day, claiming their ability to unwind the failed cryptocurrency hedge fund has been impeded by his refusal to cooperate with their investigation into the firm’s collapse, Bloomberg News reported. The substantial fine is warranted because Davies hasn’t responded to a subpoena served nearly 5 months ago, lawyers for the 3AC liquidators said in a filing in New York bankruptcy court earlier this week. The decision to impose the fine is up to Judge Martin Glenn who said in a ruling earlier this year that Davies risked being held in contempt of court if he failed to comply with the subpoena and continued to sit out the proceedings. Liquidators have taken unorthodox steps in an effort to get the 3AC co-founders to turn over information, including getting approval from Glenn to issue the subpoena to Davies via Twitter, where he frequently posts. Given the circumstances, a $10,000-per-day fine “is fair and likely meaningful in persuading Davies to respond,” the liquidators said. The liquidators have said they don’t know where Davies or fellow co-founder Su Zhu are currently residing. However, they referenced a June 9 New York Times article that reported Davies flew to Bali after 3AC collapsed. In a sworn statement, 3AC liquidator Russell Crumpler cited Davies’ comments in the article as evidence that the founder has shown no remorse for the collapse of the firm, which owes creditors roughly $3 billion.

Proppant Tech Services LLC began producing frac sand — used for hydraulic fracturing, or fracking, to drill in rock — to sell to oil and gas companies or other sand processors in August at a 179-acre sand quarry in south Bexar County, Texas, the San Antonio Express-News reported. The company generated $6 million in revenue in its first six months. However, loans totaling about $8.8 million to Proppant and landowner NA Land Investments LLC ended up in default. The lender, Amarillo National Bank, last month notified the borrowers that it would foreclose on the collateral. The companies’ owners — Anirban “Bon” Haldar, Murray Moran and Ignacio Martinez — had made individual guarantees that the loans would be repaid. Each owns a third of both companies. To avoid losing the assets in foreclosure, Martinez acquired the debt from the bank through his company I.M.Investments LLC. He also owns IPE Aggregate LLC, a New Braunfels-based industrial equipment supplier that provided some of the equipment for Proppant’s operations. He wasn’t acting as a white knight for his partners, however, as he subsequently demanded that they relinquish the collateral and cease all operations and control of Proppant. I.M. Investments even posted the land for next month’s foreclosure auction. Haldar and Moran ignored the request, so I.M. Investments last week sued them in state District Court in San Antonio and obtained a temporary restraining order that bars them operating Proppant. They responded by putting Proppant and NA Land into bankruptcy on June 11.

Cryptocurrency trading platform Bittrex is expected to resume customer withdrawals on June 15 following an order from a judge in the U.S. Bankruptcy Court for the District of Delaware, Cointelegraph.com reported. The decision does not settle the question of the subordination of U.S. government claims, which had led to objections against its plan. “Objections (if any) to the Motion having been withdrawn, resolved or overruled on the merits,” Judge Brendan Shannon’s June 13 order read. It went on to stipulate that nothing in the motion or the order constituted a finding on whether crypto assets or transactions with them are securities. The order also specified that it does not determine the priority of creditors or prohibit the U.S. from clawing back assets from customers if it is not paid in full. Bittrex’s largest creditor is the U.S. Treasury’s Office of Foreign Assets Control (OFAC), to which it owes $24 million.

Members of Oklahoma’s billionaire Schusterman family have beaten back a lawsuit alleging that their $7.2 billion sale of Samson Resources to a KKR-led private equity consortium unfairly enriched them to the detriment of the oil-and-gas company’s creditors in bankruptcy, WSJ Pro Bankruptcy reported. A trustee pursuing recoveries for creditors in Samson’s bankruptcy had sued the former owners in 2017, saying the buyers paid twice the company’s fair market value in a 2011 deal. The trustee had alleged that the deal burdened Samson with more debt than it could handle, leading to its bankruptcy in 2015. In a ruling Wednesday, Judge Brendan Shannon in the U.S. Bankruptcy Court in Wilmington, Del., said the trustee failed to make its case that the subsequent owners overpaid. “The gold standard for determining the value of an asset is to sell it in an open and fair market,” the judge said. “A thing is worth what a willing buyer will pay to a willing seller following a proper marketing process” at arms’ length, with both having reasonable knowledge of relevant facts. Opinions of valuation experts, such as the one that the Samson trustee used, are less reliable than negotiations in determining the fair market value of an asset, he said. Samson took on more than $3 billion in debt as part of the buyout and struggled afterward as oil and gas prices fell.

Federal prosecutors investigating the collapse of the FTX cryptocurrency exchange said late Wednesday that, at least for now, they would withdraw several of the charges facing the company’s founder, Sam Bankman-Fried, the New York Times reported. In a court filing, the prosecutors said they would proceed to a trial in October without pursuing five of the 13 charges against Mr. Bankman-Fried — a set of accusations that the government added to the crypto mogul’s indictment in the months after he was extradited from the Bahamas in December. Among those charges was a bank fraud count, as well as an allegation that Mr. Bankman-Fried bribed a foreign government. The withdrawal of those counts was a victory for Mr. Bankman-Fried, who has argued that prosecutors should not have been allowed to charge him with additional crimes after his extradition. But the win came with a major caveat: The prosecutors asked the judge overseeing the case, Lewis A. Kaplan of Federal District Court in Manhattan, to schedule a second trial in early 2024 on those five counts. The prosecutors said that the delay was a procedural necessity. This week, Mr. Bankman-Fried won a ruling in the Bahamas, where FTX was based, granting him the ability to argue in court there that the Bahamian government should not consent to the additional charges. That legal dispute could take months to unfold.

Sam Bankman-Fried, the indicted founder of bankrupt cryptocurrency exchange FTX, wants a U.S. judge to throw out criminal charges brought against him following his extradition from the Bahamas, Reuters reported. In papers filed late Monday in Manhattan federal court, lawyers for the former billionaire said they asked Bahamas' Supreme Court to bar the country's government from authorizing U.S. prosecutors to move forward on the five charges, until their client has a chance to be heard. The lawyers said that a sixth charge, for violating U.S. campaign finance laws, should also be dismissed even though it was brought before his extradition, because the Bahamas did not consent to it. They want U.S. District Judge Lewis Kaplan to dismiss the charges, or try them separately from seven additional charges at Bankman-Fried's scheduled Oct. 2 trial. FTX was based in the Caribbean country. "To proceed otherwise would cause significant prejudice to Mr. Bankman-Fried and should not be permitted," his lawyers wrote on Monday. Bankman-Fried, 31, was extradited in December from the Bahamas to face charges he stole from customers, lied to investors and lenders, and violated campaign finance laws. Federal prosecutors in Manhattan later accused him of bank fraud and bribing Chinese officials.

Slot machine operator Lucky Bucks is facing an early challenge to its chapter 11 case from junior bondholders after the closely held business proposed a restructuring that recoups a small fraction of more than $440 million in debt-funded dividends paid to shareholders in recent years, the Wall Street Journal reported. Unsecured bondholders including Marathon Asset Management, Monarch Alternative Capital and BC Partners objected on Monday to the company’s chapter 11 strategy that would mostly wipe out $300 million in debt they bought in 2021 and 2022. Lucky Bucks, among the largest operators of coin-operated amusement machines in Georgia, filed for chapter 11 on Friday blaming slowing consumer spending and greater enforcement of Georgia gaming regulations that took some of its machines at gas stations and convenience stores in the state offline. In bankruptcy, the business has proposed handing 100% ownership to senior lenders, while driving down its roughly $900 million debt load closer to $100 million. Lucky Bucks’ decline came after it loaded up on debt in 2021 and 2022 to fund shareholder distributions, including its majority owner, Dallas private-equity firm Trive Capital.