  We study the gravitational collapse problem of rotating shells in
three-dimensional Einstein gravity with and without a cosmological constant.
Taking the exterior and interior metrics to be those of stationary metrics with
asymptotically constant curvature, we solve the equations of motion for the
shells from the Darmois-Israel junction conditions in the "co-rotating" frame.
We study various collapse scenarios with "arbitrary" angular momentum for a
variety of geometric configurations, including anti-de Sitter, de Sitter, and
flat spaces. We find that the collapsing shells can form a BTZ black hole, a
three-dimensional Kerr-dS spacetime, and an horizonless geometry of point
masses under certain initial conditions. For pressureless dust shells, the
curvature singularity is "not" formed due to the angular momentum barrier near
the origin. However when the shell pressure is nonvanishing, we find that for
all types of shells with polytropic-type equations of state (including the
perfect fluid and the generalized Chaplygin gas), collapse to a naked
singularity is "possible" under generic initial conditions. We conclude that in
three dimensions angular momentum does not in general guard against violation
of cosmic censorship.
