FTX customer sues hedge fund over alleged stolen bankruptcy gains

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As a seasoned crypto investor with over a decade of experience in navigating the digital asset landscape, I can empathize with Nikolas Gierczyk’s predicament. Dealing with hedge funds and bankruptcy claims is no walk in the park, especially when it comes to crypto exchanges like FTX.

As an analyst, I’m reporting that a FTX customer named Nikolas Gierczyk is voicing concerns about Olympus Peak, claiming they’ve underpaid him following the purchase of his FTX bankruptcy claim valued at approximately $1.59 million. He alleges that Olympus Peak owes him even more in additional recovery.

Based on a Bloomberg report dated October 11th, Nikolas Gierczyk of California is filing a lawsuit against Olympus Peak Hedge Fund, claiming they failed to uphold his entitlement to further compensation.

He argues that the hedge fund is significantly in his debt, exceeding $1 million, based on the FTX bankruptcy payout plan which anticipates creditor gains ranging between 129% and 146%.

According to Gierczyk, it was decided between him and Olympus Peak that they would enter into a purchasing agreement. This occurred when the hedge fund acquired the bankruptcy claim at a significant 42% reduction in price. He was assured that he’d receive any additional distributions stemming from the bankruptcy process.

In a complaint submitted to the Manhattan federal court on October 10th, Gierczyk’s legal team stated that Olympus Peak had clarified they would not uphold their part of the agreement.

Located in Greenwich, Connecticut, Olympus Peak operates as a hedge fund. As this text was being composed, they have yet to offer a comment in response to Bloomberg’s query.

Approximately two years following the collapse of FTX in November 2022, a Delaware bankruptcy court has given its approval for the crypto exchange’s proposed restructuring scheme on October 7.

As per a declaration, the cryptocurrency exchange firm asserts it has accumulated property valued between approximately $14.7 billion and $16.5 billion. This figure exceeds FTX’s earlier estimate of its debt to creditors, which was roughly $11.2 billion.

In the future, we anticipate fully reimbursing the original amounts of bankruptcy claims for non-governmental creditors, along with interest, through a process that will be the largest and most intricate distribution of assets from a bankrupt estate ever, as stated by John Ray, who assumed the role of FTX CEO following the company’s bankruptcy filing.

As per the bankrupcy plan sanctioned by Delaware Judge John Dorsey, approximately 98% of FTX’s creditors are anticipated to receive over 118% of their claim as it stood in November 2022 when the exchange sought bankruptcy protection. This substantial payout can be attributed to the robust growth and bullish trend observed in the crypto market over the past two years.

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2024-10-11 09:25