Mars FX US - Chapter 11 Case Summary

Business Description

Mars FX US LP (the "Debtor") is a Delaware limited partnership with its registered office at c/o United Agent Group Inc., 1521 Concord Pike, Suite 201, Wilmington, Delaware 19803. The Debtor served as the "Onshore Feeder" in a cross-border master-feeder investment structure established to raise capital from U.S. investors for foreign exchange trading.

• The structure comprised the Debtor and two Cayman Islands entities—Mars FX Master Ltd (the "Master Fund") and Mars FX International Ltd (the "Offshore Feeder" and, together with the Master Fund, the "Cayman Entities"). U.S. investor capital was raised through the Debtor, while non-U.S. investor capital was raised through the Offshore Feeder, with all funds deployed through the Master Fund into an underlying trading strategy.
• According to a shareholding register dated January 31, 2025, the Debtor owns 75.64% of the Master Fund.

The Debtor is operationally and commercially intertwined with the Cayman Entities. Novus Capital Partners LLC ("Novus" or the "General Partner") serves as both the General Partner of the Debtor and the investment manager of the Cayman Entities.

• Novus is controlled by members David Choi, Ashish Patel, Patrick Hofman, and Jae Choi, each holding a 25% membership interest.

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Corporate History

Management of the Debtor's assets, affairs, and operations is vested in the General Partner under the Amended and Restated Partnership Agreement dated February 7, 2024 (the "Partnership Agreement"). The Partnership Agreement permits the General Partner to delegate responsibilities by contracting with other persons, including for the appointment of a CRO and the filing and administration of Chapter 11 proceedings.

Appointment of CRO

• By resolution dated March 16, 2026, the General Partner determined it was necessary and advisable to appoint an experienced restructuring and insolvency professional as CRO and authorized representative of the Debtor in connection with restructuring the Debtor, including filing Chapter 11 proceedings.
• Luke Furler, a Managing Director of the Restructuring & Insolvency team and Head of International at Quantuma, was appointed to the role. Furler also serves as one of the Joint Official Liquidators of the Cayman Entities.

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Operations Overview

Between August 3, 2020, and August 1, 2024, the Debtor and the Cayman Entities collectively invested approximately $277,371,000 into a trading structure operated by Tech RealFX Ltd ("TRFX") (the "TRFX Investment Amount"). Capital raised through the Debtor and the Offshore Feeder was ultimately deployed into the same trading arrangement, with funds channeled through various accounts to accounts held by TRFX.

Fund Flow Mechanics

• Bank-account materials on file identify accounts in the name of the Debtor at JPMorgan Chase Bank in New York and The Northern Trust International Banking Corporation ("Northern Trust") in New Jersey.
  • Between August 2, 2020, and February 25, 2025, the Debtor transferred $122,336,000 from these accounts to Bank of Communications (Hong Kong) Limited ("BOCOM").
  • Between April 7, 2022, and August 1, 2024, the Debtor transferred $131,250,000 from Northern Trust to accounts held with Legacy Trust Company Limited ("Legacy Trust") in Hong Kong.
• Funds are understood to have then flowed from BOCOM and Legacy Trust to TRFX accounts in Hong Kong, and preliminary investigations suggest that certain balances to which the Debtor and the Cayman Entities may be entitled are held at broker accounts in the names of TRFX and associate entities, 4XHUB Limited ("4XHUB") and Treal Capital Limited ("Treal").
• Broker accounts in the names of TRFX, 4XHUB, and Treal were held at Equiti Capital UK Limited ("Equiti") in the UK and GO Markets Pty Ltd ("GO Markets") in Australia (the "Broker Accounts"). Trading from the Broker Accounts was understood to take place through a technology platform operated by TRFX.
• TRFX, 4XHUB, and Treal are all understood to be ultimately controlled by an individual named Mr. Tan Jit Chun ("Mr. Tan") through direct and indirect (via his wife, Mrs. Ing Yong Wee) ownership and directorships.

Custody and Control Issues

• Investigations are ongoing as to the entity that held beneficial ownership of the TRFX accounts with BOCOM and Legacy Trust, and with Equiti and GO Markets, due to there being identically named companies for TRFX and Treal in BVI and Hong Kong, and for 4XHUB in Labuan and Hong Kong.
• The rights to the Platform Balance are understood to have been assigned to 4XHUB pursuant to an assignment agreement dated February 7, 2024, between Novus, the Master Fund, TRFX, and 4XHUB (the "Assignment Agreement"), although such funds did not move to 4XHUB in practice.
• There are unresolved questions regarding the website domain that hosted the trading platform, which appears to have moved from TRFX to another entity in or about October 2022, suspected to have potentially impacted oversight and control of the platform.
• Different parties have advanced materially inconsistent accounts regarding authority and operational control. The BVI Proceedings allege that an individual named Mr. "Jackie" Chong Cheong Sin ("Mr. Chong") acted for TRFX in documenting relevant arrangements, while TRFX denies that he had authority to act on its behalf and denies that it received or held client monies.

Shared Service Providers and Records

• The Debtor and the Cayman Entities share overlapping counterparties, service providers, and records. Both were audited by U.S. and Cayman member firms of Deloitte & Touche LLP ("Deloitte") and administered by subsidiaries of Krypton Fund Services Ltd ("Krypton").
• The Debtor's relevant records are dispersed across multiple third parties across several jurisdictions, including the United States, Cayman, the British Virgin Islands, Hong Kong, Labuan, the UK, and Australia. Key record holders include Krypton (investor, capital-account, and redemption information), Deloitte (audit files and broker confirmations), Equiti and GO Markets (broker-side records), BOCOM and Legacy Trust (transfer records), and TRFX, 4XHUB, Treal, and current or former advisers (platform records, statements, and related communications).

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Prepetition Obligations

The Debtor's financial picture remains incomplete in several important respects, and the CRO is not presently in a position to offer a final solvency opinion. The materials available give rise to serious concern as to the Debtor's present liquidity, its ability to continue in the ordinary course, and its balance sheet solvency.

Recorded Positions and Audited Financials

• The 2022 and 2023 audited financial statements for the Master Fund and the Debtor received unqualified independent auditor's reports on March 24, 2023, and May 16, 2024, respectively. The audited balances reported the following:
  • The Master Fund reported total cash at bank and broker of $248,090,013 in 2022 and $381,349,989 in 2023.
  • The Debtor reported an investment in the Master Fund at fair value of $207,345,265 in 2022 and $325,273,394 in 2023, with cash at bank of $8,557,855 in 2022 and $7,323,213 in 2023.
• The engagement letter for the 2024 audit was not signed by both parties and the audit was never completed.
• Based on the shareholder register of the Master Fund dated January 31, 2025, the Debtor holds 1,464,828.2367 Class A shares at a stated NAV price of $296.4860 per share, for a recorded value of $434,301,015.57, representing 75.64% of the Master Fund.
• An investor register for the Debtor as of January 31, 2025, records 535 investor positions with an aggregate recorded NAV of approximately $432,629,274.

Platform Balance and BVI Proceedings

• The Debtor and the Cayman Entities are joint claimants in ongoing proceedings against TRFX in the British Virgin Islands (BVIHC (COM) 2025/0283) (the "BVI Proceedings") seeking recovery of approximately $566,730,000, which represents the combined alleged platform position inclusive of purported profits as claimed in a withdrawal request dated November 11, 2024 (the "Platform Balance").
• The presently available materials indicate that broker-side balances may have been held in accounts standing in the names of TRFX, 4XHUB, or Treal, while being represented as held for the benefit of the Master Fund and, indirectly, the Debtor. The disconnect between legal account name and asserted financial entitlement is a central issue to be reconciled.

Liquidity and Cash Position

• The CRO does not presently have direct access to complete bank records, a current cash ledger, or a final cash reconciliation for the Debtor. The current materials identify bank and trust accounts historically associated with the Debtor and record substantial historic transfers, but do not establish readily available unrestricted liquidity sufficient to fund urgent preservation, control, and recovery steps.
• External funding is necessary to support the preservation, investigation, restructuring, and recovery process.

Creditor and Investor Positions

• The creditor and liability picture remains under development. A key unresolved issue is whether investors with pending withdrawal requests should be treated as creditors or continue to be treated as limited partners. The withdrawal requests, investor notices, and underlying registers necessary to reconcile this position are not currently available.
• The Top 20 unsecured creditors list was prepared on the basis of the Debtor's presently available books and records, including the investor register and available withdrawal and distribution data, and may require further review or amendment as additional information is obtained.

Potential Audit Claims

• The JOLs are investigating a potential professional negligence and/or breach of contract claim against Deloitte arising from audit work performed in respect of the Debtor and the Cayman Entities for 2022 and 2023 (the "Potential Audit Claims").
  • The 2022 audit engagement letter, dated March 6, 2023, and signed March 19, 2023, contains a dispute resolution clause requiring binding arbitration in New York.
  • On current information, there is a sufficient basis to investigate whether the audit work adequately verified balances reported as held with brokers or through associated material.
  • Pursuant to Bankruptcy Code § 108, because the applicable limitations period for the 2022 Audits will not have expired before the petition date, the Debtor will have additional time to investigate these claims. Preserving the Potential Audit Claims is one important reason the Debtor is seeking immediate protective relief.

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Events Leading to Bankruptcy

Investment Activity and Discovery of Regulatory Issues

From 2020 onward, substantial sums associated with the Debtor were transferred, on behalf of the Master Fund, into trading arrangements then said to be in place with TRFX. Those transfers were initially made to an account at BOCOM and later through Legacy Trust.

• In early 2024, management came to understand that TRFX was not a regulated entity. On January 18, 2024, 4XHUB was presented as a regulated alternative, and on February 6, 2024, the Assignment Agreement was entered into in connection with an intended shift of the claimed platform position.

Withdrawal Request and Non-Payment

On November 11, 2024, Novus, on behalf of the Master Fund, submitted a withdrawal request to TRFX and 4XHUB demanding withdrawal in full of all 2,250 trading accounts held in the name of the Master Fund, totaling approximately $566,730,000 (the "Withdrawal Request"). The Withdrawal Request required distribution of the full Platform Balance by January 30, 2025.

• Payment was not made by the stipulated date. By letter dated January 23, 2025, TRFX attributed the delay to an anti-money laundering investigation in Hong Kong while stating that the monies held for the Master Fund remained securely with the brokers and that trading would continue.
• On January 27, 2025, Novus informed investors that the Debtor and the Cayman Entities could no longer operate in the normal course and that wind-down steps were being taken.
• On January 31, 2025, the Cayman Entities resolved to suspend redemptions and payment of redemption proceeds with immediate effect.

Enforcement Steps in BVI and Hong Kong

Following the continuing non-payment, statutory demands were served on February 17, 2025, on BVI and Hong Kong entities.

• The Master Fund served a statutory demand on TRFX (BVI) in the amount of $26,821,550.97 (being cash sums believed to be in the Master Fund's accounts and the sum that was supposed to be paid on January 20, 2025). The Master Fund also served a statutory demand on Tech RealFX Limited (Hong Kong).
• On February 28, 2025, TRFX filed a set aside application with the BVI Court, contending that: (i) the relevant agreements were executed by Mr. Chong without authority; (ii) certain correspondence and broker statements relied upon by the Master Fund were forged; (iii) the requisite notice period had not elapsed; (iv) there was no evidence of transfer of funds from the Master Fund; and (v) the parties had agreed to arbitrate disputes. The set aside application was subsequently discontinued on March 21, 2025.
• On June 26, 2025, the Debtor and the Cayman Entities commenced the BVI Proceedings in relation to the Platform Balance. On November 10, 2025, TRFX filed its defense, broadly disputing the authenticity or authority underlying key documents, denying receipt or custody of client monies, and advancing a materially different account of the trading history and balances. The BVI Proceedings remain ongoing.

Liquidation of the Cayman Entities

• On January 13, 2026, the Cayman Entities were placed into voluntary liquidation by special resolutions passed by the voting shareholder of each entity.
• On March 6, 2026, the Grand Court of the Cayman Islands ordered that the winding up of the Cayman Entities be continued under the supervision of the Grand Court and appointed Luke Furler, Tan Kim Han (Joffrey) (both of Quantuma (Singapore) Pte Ltd), and Owen Walker of R&H Restructuring (Cayman) Ltd as Joint Official Liquidators of the Cayman Entities.
• Since those appointments, the JOLs have been engaged in securing books and records, issuing preservation notices, liaising with service providers and counterparties, and coordinating counsel across the United States, Cayman, the British Virgin Islands, and Hong Kong.

Chapter 11 Filing and Go-Forward Strategy

Having regard to the ongoing BVI Proceedings—which presently represent the Debtor's principal prospective asset and recovery route—the General Partner understood there to be material uncertainty as to the Debtor's ability to continue operating as a going concern. In the absence of recoveries from TRFX or related claims in the near term, the General Partner did not consider there to be any realistic prospect of the Debtor resuming ordinary withdrawal processing or investor distribution.

• The Debtor has suffered a practical loss of purpose: the Master Fund is in liquidation, the Debtor's principal value is tied to a disputed and presently unrecovered upstream position, and the Debtor is not in a position to carry on the ordinary investment, redemption, and distribution functions for which it was formed.
• The General Partner consulted with its members and determined that it is in the best interests of the Debtor, its creditors, limited partners, and other interested parties to file a voluntary petition seeking relief under Chapter 11.

On March 23, 2026 (the "Petition Date"), the Debtor filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York.

• The Chapter 11 process is intended to provide a controlled framework for the Debtor and the Cayman Entities to undertake coordinated steps as to discovery, funding, and recovery planning while reducing the risk of fragmented stakeholder action. Post-filing work will proceed across several jurisdictions in parallel:
  • In the United States, the focus is on securing effective control of the Debtor, preserving claims—including time-sensitive Potential Audit Claims—and using available restructuring and discovery tools, including Rule 2004 subpoenas to obtain books and records from U.S.-based persons and entities.
  • In Cayman and the British Virgin Islands, the immediate work includes coordination with the supervised liquidations and progression of the BVI Proceedings, with the deadline for the claimants' response extended to June 8, 2026.
  • In Hong Kong, targeted disclosure or preservation steps may be directed to banks, trust providers, brokers, and other third parties.
  • In Malaysia, including Labuan, the work is focused on 4XHUB-related records and regulatory engagement with the Labuan Financial Services Authority.
• The Debtor believes that under the protection of the Court, it will be able to maximize the value of its assets for the benefit of its creditors and other stakeholders and propose a confirmable Chapter 11 plan.