A former California-based FTX customer is taking Olympus Peak hedge fund to court, alleging the firm's bankruptcy claims purchasing arm has reneged on its promise to make payments on a claim sold to them. According to court documents filed in the U.S. District Court Southern District Of New York, Alexander Nikolas Gierczyk agreed to sell his $1.59 million FTX bankruptcy claim to Olympus Peak Trade Claims Opportunities Fund at a 42% discount, with an 'excess claim provision' in place. This provision stated that if the claim was ultimately allowed and exceeded the initial claim amount, the buyer would purchase the excess amount at the agreed-upon purchase rate.
Gierczyk only agreed to the sale because the purchase agreement included a clause granting him the right to additional recovery if his claim was paid above par through bankruptcy proceedings. His attorneys claim that the latest FTX disclosure statement indicates similar claims may receive up to 146% of their value in distributions.
However, Olympus Peak allegedly informed Gierczyk that they would not fulfill their end of the bargain. In response to the lawsuit, an Olympus Peak representative stated, 'We disagree with your position that you have retained any economic interest in the claim.' Ariel Lavinbuk, a partner at Kramer Levin and counsel for Olympus Peak, described the lawsuit as 'entirely without merit' and based on a misreading of the contract. During the early stages of FTX's bankruptcy, claims were trading at 13 cents on the dollar on bankruptcy marketplaces. Bloomberg previously reported on the case.