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Gierczyk claims Olympus Peak denied him over $1 million in extra compensation following FTX’s reorganization plan.
Key Notes
Gierczyk claims Olympus Peak denied him over $1 million in extra compensation following FTX's reorganization plan.FTX's surplus from strong crypto market boosts potential payouts for claimants, reaching $14 billion.CEO John Ray confirms 98% of creditors will receive 119% of their claims.A lawsuit filed by a customer of the bankrupt cryptocurrency exchange FTX has drawn the crypto community’s attention. Nikolas Gierczyk from California has sued Olympus Peak Trade Claims Opportunities Fund, accusing the hedge fund of underpaying him for his claim in the FTX bankruptcy proceedings, according to Bloomberg.
Last year, Gierczyk sold his $1.59 million FTX claim to Olympus Peak at a significant 42% discount, receiving approximately $900,000. However, with FTX recently approving a bankruptcy reorganization plan that promises to repay customers between 129% and 146%, Gierczyk contends that Olympus Peak could gain over $1 million from the arrangement while he receives substantially less.
On Thursday, Gierczyk filed a lawsuit in Manhattan federal court, claiming he secured a clear right to extra compensation from Olympus Peak in their purchase agreement. His attorneys stated:
“Olympus Peak clearly refused to honor their agreement.”
This violation has led Gierczyk to seek legal action, arguing that the hedge fund’s behavior was unjust and financially damaging to him.
Unusually for bankruptcy cases, FTX has gathered billions more than needed to compensate customer losses from its November 2022 collapse. This surplus is largely due to a strong cryptocurrency market over the past year, which has boosted the value of FTX’s remaining assets. As a result, claimants like Gierczyk may receive significantly larger payouts than initially expected.
Olympus Peak, headquartered in Greenwich, Connecticut, has not yet responded to the allegations outside regular business hours. The hedge fund’s alleged refusal to honor the extra recovery rights raises questions about the ethical practices of firms involved in distressed asset acquisitions.
Gierczyk v. Olympus Peak Trade case is currently being heard in the US District Court for the Southern District of New York in Manhattan. As the trial moves forward, both parties will present comprehensive arguments about the legitimacy of the purchase agreement and Olympus Peak’s responsibilities based on the terms negotiated with Gierczyk.
FTX Bankruptcy Returns $14 Billion
A Delaware federal bankruptcy judge has approved a reorganization plan allowing most FTX creditors to profit from their investments, as previously reported by Coinspeaker. The refund plan will distribute over $14 billion to FTX customers, marking one of the largest asset distributions in bankruptcy history, two years after FTX’s collapse.
New CEO John Ray announced that 98% of creditors will receive 119% of their claims, exceeding FTX’s $11.2 billion debt with up to $16.5 billion in assets. This recovery stems from asset sales and a 260% surge in Bitcoin’s value since FTX’s bankruptcy.
The estate plans global distributions, with $900 million from selling FTX’s Anthropic stake. Meanwhile, Sam Bankman-Fried was convicted and sentenced to 25 years, closing a tumultuous chapter and setting a precedent for future cryptocurrency bankruptcies.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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With over 3 years of crypto writing experience, Bena strives to make crypto, blockchain, Web3, and fintech accessible to all. Beyond cryptocurrencies, Bena also enjoys reading books in her spare time.
