FTX customer sues hedge fund over alleged stolen bankruptcy gains

FTX client Nikolas Gierczyk accuses Olympus Peak of underpaying him after purchasing the FTX bankruptcy claim for $1.59 million, and claims the hedge fund owes him much more in additional bailouts.

According to Bloomberg’s October 11 report, Californian Nikolas Gierczyk is suing hedge fund Olympus Peak for not granting him the right to additional recovery.

He claims the hedge fund owes him more than $1 million from the deal because creditors reaped about 129% to 146% from the FTX bankruptcy settlement plan.

Gierczyk stated that he and Olympus Peak reached a purchase agreement when he purchased the hedge fund’s bankruptcy claim “at a significant discount of 42%” because he was promised excess distributions from the bankruptcy.

“However, Olympus Peak has made clear that they will not fulfill their end of the agreement,” Gierczyk’s lawyers wrote in a complaint filed Oct. 10 in federal court in Manhattan.

Olympus Peak is a hedge fund based in Greenwich, Connecticut. There was no response to Bloomberg’s request for comment at the time of this writing.

On October 7, a Delaware bankruptcy judge approved FTX’s reorganization plan, nearly two years after the crypto exchange’s November 2022 collapse.

According to the statement, the cryptocurrency exchange company claims to have achieved a value between $14.7 billion and $16.5 billion in property distribution. That amount exceeds FTX’s previous estimate of what it owes creditors, which is about $11.2 billion.

“Looking ahead, we are prepared to return 100% of bankruptcy claim amounts plus interest to nonprofit creditors in what will be the largest and most complex bankruptcy estate asset distribution in history,” said John Ray, who later took over as CEO of FTX. The company filed for bankruptcy.

According to the plan approved by Delaware bankruptcy judge John Dorsey, 98% of FTX’s creditors will receive 118% of their receivables as of November 2022, when the exchange files for bankruptcy protection. This massive payout was possible due to the upward trend of the crypto market over the last two years.