Former FTX Customer Sues Hedge Fund, Says It Reneged on Bankruptcy Payout Deal

• A former customer of FTX is suing a hedge fund he sold his bankruptcy claim to.
• Alexander Nikolas Gierczyk alleges Olympus Peak is reneging on paying an extra amount he says he's owed because the bankruptcy payout is more than expected.

A California-based former customer of FTX is suing hedge fund Olympus Peak alleging that the firm's bankruptcy claims purchasing desk has withheld promised payments on a claim he sold to it.

In documents filed with the U.S. District Court Southern District Of New York, Alexander Nikolas Gierczyk says he agreed to sell a $1.59 million FTX bankruptcy claim at a 42% discount to Olympus Peak Trade Claims Opportunities Fund with an "excess claim provision."

The agreement provided that “if the Claim is ultimately allowed … in an amount that is greater than the Claim Amount, Buyer will purchase such Excess Claim Amount by paying … the Excess Claim Amount multiplied by the Purchase Rate.”

Gierczyk agreed to the sale only because "the purchase agreement contained a clause that expressly gave him the right to receive additional recovery in the event his claim was paid above par through the bankruptcy proceedings," according to the filing.

Gierczyk's attorneys write in the filing that the most recent FTX disclosure statement says that claims similar his are estimated to receive as much as 146% of their value in distributions. But, they allege, Olympus Peak, "made clear that they would not be fulfilling their end of the bargain.”

"We disagree with your position that you have a retained any economic interest in the claim,” an Olympus Peak representative wrote to Gierczyk.

"This lawsuit is entirely without merit and is based on a plain misreading of the parties’ contract,” Ariel Lavinbuk, a Partner at Kramer Levin, Olympus Peak's counsel, wrote to CoinDesk in response for a request for comment.

In the early days of FTX's bankruptcy, claims were going for 13 cents on the dollar on bankruptcy marketplaces.

Bloomberg reported on the case earlier.

UPDATE (October 12 12:50 UTC): Adds comment from Olympus Peak's counsel.