Gierczyk alleges that Olympus Peak failed to provide him with over $1 million in additional compensation as a result of FTX’s reorganization plan.
A customer of the insolvent cryptocurrency exchange FTX has initiated a lawsuit that has captured the focus of the crypto community. According to Bloomberg, Nikolas Gierczyk, a California resident, has filed a lawsuit against Olympus Peak Trade Claims Opportunities Fund, alleging that the hedge fund failed to adequately compensate him for his claim in the FTX bankruptcy proceedings.
Gierczyk sold his $1.59 million FTX claim to Olympus Peak last year at a substantial 42% discount, netting him approximately $900,000. Nevertheless, Gierczyk argues that Olympus Peak could potentially make over $1 million from the arrangement, despite the fact that he receives markedly less, following the recent approval of a bankruptcy reorganization plan by FTX. The plan pledges to repay customers between 129% and 146%.
Gierczyk filed a lawsuit in Manhattan federal court on Thursday, asserting that he has an obvious right to additional compensation from Olympus Peak under their purchase agreement.
Gierczyk has initiated legal proceedings in response to this violation, contending that the hedge fund’s conduct was financially detrimental and unjust.
FTX has amassed billions in excess of the required amount to compensate customers for the losses incurred as a result of its November 2022 collapse, which is uncommon for bankruptcy cases. This surplus is primarily attributable to the robust cryptocurrency market that has increased the value of FTX’s remaining assets over the past year. Subsequently, claimants such as Gierczyk may earn payments that exceed their initial expectations.
Based in Greenwich, Connecticut, Olympus Peak has yet to respond to the allegations outside of its regular business hours. The hedge fund’s purported refusal to honor the additional recovery rights raises concerns regarding the ethical practices of firms that engage in distressed asset acquisitions.
Currently, the US District Court for the Southern District of New York in Manhattan is hearing the Gierczyk v. Olympus Peak Trade case. Both parties will present exhaustive arguments regarding the legitimacy of the purchase agreement and Olympus Peak’s responsibilities in accordance with the terms negotiated with Gierczyk as the trial progresses.
Coinspeaker previously reported that a Delaware federal bankruptcy judge has approved a reorganization plan that will enable the majority of FTX creditors to profit from their investments. Two years following the collapse of FTX, the refund plan will distribute more than $14 billion to FTX customers, making it one of the largest asset distributions in bankruptcy history.
John Ray, the new CEO, declared that 119% of the claims of 98% of creditors will be paid, surpassing FTX’s $11.2 billion debt with up to $16.5 billion in assets. This recovery is the result of a 260% increase in the value of Bitcoin and asset sales since FTX’s bankruptcy.
With $900 million from the sale of FTX’s Anthropic stake, the estate intends to distribute its products worldwide. In the interim, Sam Bankman-Fried was convicted and sentenced to 25 years, which marked the conclusion of a tumultuous chapter and established a precedent for future cryptocurrency bankruptcies.
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