FTX customer sues hedge fund over alleged stolen bankruptcy gains

FTX customer Nikolas Gierczyk accuses Olympus Peak of underpaying him after buying his FTX bankruptcy claim worth $1.59 million, alleging the hedge fund owes him much more in additional recovery.

According to a Bloomberg report on Oct. 11, Californian Nikolas Gierczyk is suing hedge fund Olympus Peak for not honoring his right to additional recovery.

He claims that the hedge fund owes him much more than $1 million from their deal, as creditors stand to gain around 129% to 146% from the FTX bankruptcy payout plan.

Gierczyk stated that he and Olympus Peak settled on a purchase agreement when the hedge fund bought the bankruptcy claim at a “substantial 42% discount,” as he was promised any excess distribution from the bankruptcy.

“However, Olympus Peak made clear that they would not be fulfilling their end of the bargain,” Gierczyk’s lawyers wrote in a complaint filed to the federal court in Manhattan on Oct. 10.

Olympus Peak is a hedge fund based in Greenwich, Connecticut. It has not responded to Bloomberg’s request for comment at the time of writing.

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

According to a statement, the crypto exchange company claims it has amassed between $14.7 billion and $16.5 billion worth in property distribution. An amount that surpasses FTX’s previous estimation of what it owes creditors, which is around $11.2 billion.

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

According to the plan approved by Delaware bankruptcy Judge John Dorsey, 98% of FTX’s creditors will gain 118% of their claim as of November 2022, when the exchange filed for bankruptcy protection. This large payout is made possible due to the bullish nature of the crypto market in the past two years.