Tommy Distressed Investing (Personal Business)

Tommy's path to distressed investing wasn't chosen—it was inherited. His mother was a bankruptcy lawyer, and as a kid with no daycare, he spent afternoons hanging out at the courthouse, in clerk's offices with trustees, surrounded by paper files and legal process. While other kids were at soccer practice, Tommy was learning the grammar of insolvency. By middle school, he and his brother were already flipping "hood houses" with capital his mom fronted, buying beat-up properties for $20-30k and selling them for $60k. The seed was planted: there's money in broken things.

He bought his first stock at 11 or 12—Home Depot, because he'd read a Harvard Business Review article about the new CEO's "ethos." It didn't work. Then INCO (nickel) based on a Foreign Affairs article about rising nickel prices—that one did. The point wasn't the outcomes; it was the framework: study deeply, develop conviction, act. He was obsessed with Warren Buffett's *Snowball*, the hunting club story, the methodical hunt for undervalued assets using informational advantage and hustle.

In his early 20s, Tommy ran a small hedge fund. In 2014, he became fascinated by Mt. Gox—the crypto exchange that had been hacked, losing ~600,000 of its 800,000 Bitcoin. The math was simple: the recovered Bitcoin was worth ~$300/coin at the time; he could buy claims (the creditors' rights to the eventual payout) for about $80 per Bitcoin. That was the steak. The sizzle: Bitcoin might appreciate, they might recover more Bitcoin, the price could moon. He bought roughly $200,000 worth—about 10% of his small fund—a massive bet for him.

He pitched the trade to a $2 billion hedge fund. The partner literally laughed him out of the conference room, slapping his knee: "Tom, that is the funniest shit I've heard all week." Bitcoin was still fringe; crypto bankruptcy claims were unthinkable. But Tommy had an advantage: his parents' bankruptcy lawyer friends. He found partners—larger distressed firms like Fortress that would co-invest, taking portions of his deals in exchange for capital and legitimacy.

The original Mt. Gox claim his fund bought? Purchased from a Google employee. Tommy didn't even have documents for Japanese court proceedings, so he jokes that Google's lawyers—advising their employee on the sale—essentially wrote his first purchase documents. He kept buying all the way up through the distribution, riding Bitcoin's appreciation. His original outside investor, a family office, made over 40x their money across seven years. Some of that was the 5x discount he negotiated; the rest was Bitcoin's rise from $300 to $10k+ by 2018.

Tommy's customer acquisition was pure hustle. He obtained the leaked creditor list from the Mt. Gox bankruptcy docket—14,000 names and email addresses. He'd search LinkedIn for people who fit a profile: under 35, tech-interested, part of Bitcoin groups. Then he'd ping them: "Hey, do you have an Mt. Gox claim? If so, we'd like to buy it." When they asked how he found them, he'd explain the filtering logic. The work was manual—verify they actually owned the claim, make sure they hadn't sold it elsewhere, explain the offer, handle medallion signature guarantees at local banks. This was the opposite of scalable. But it worked.

For larger institutional investors, his approach was relationship-based. He'd call the big distressed firms—Oak Tree, Silver Point, Oaktree—and say: "I found a $10 million deal. You want $9 million of it? I want $1 million. You don't have to pay me anything; I just need the capital." This symbiotic relationship (or "co-opetition" as he calls it) meant big firms could do smaller deals through him, and he could access capital for larger ones. He built a network of prime brokers and co-investors who trusted his claims work.

The philosophical framework worked: steak and sizzle. Buy real assets (the steak—a claim backed by actual Bitcoin or company assets), discounted heavily (the safety margin), with upside optionality (the sizzle—price appreciation, more assets recovered, legal favorable rulings). He avoided value traps: "Shop Madison, not Canal"—buy discounted real goods, not fake cheap things. He studied deep-value investors obsessively (Buffett, Howard Marks, Joel Greenblatt) and borrowed their playbooks.

What didn't work: being early in crypto as a pitch. The 2015 hedge fund rejection stung but taught him that market sentiment matters. Crypto needed legitimacy and time. FTX vindicated the strategy—when FTX collapsed, most investors fled crypto entirely. Tommy saw the steak: Sam Bankman-Fried had invested in real companies with real assets. The sizzle: crypto's future optionality. He bought FTX claims at a steep discount, betting the estate would be made whole or better by liquidating those underlying investments.

The grind of claims work is not intellectual—it's hustle. Finding creditors, verifying ownership, negotiating, managing legal documentation, and traveling to close deals. But this unglamorous work created moat: few people would do it. The big firms considered it beneath them. Tommy embraced being at "the bottom of the food chain of distressed investing," as he says, because that's where competition was thinnest.

Tommy operates as a solo distressed investor from a low-cost jurisdiction in Europe (Italy), which gives him structural cost advantages he can pass to investors. He's moved beyond just claims work to selective deep-value positions across crypto and traditional distressed situations. He can reliably compound capital at 30-50% annually on a multi-million-dollar base through claims work alone, with occasional home runs (like Mt. Gox's 40x) from major recoveries.

He describes himself as a "lifestyle business guy," but that undersells it. He gets to choose when he works, has eliminated gatekeepers (no need for a registered dealer license in claims), and can be extraordinarily selective—willing to do nothing for 6 months if he can't find a deal. His investors are now family offices and institutional co-investors who've learned to trust his legal knowledge, bankruptcy court fluency, and ability to source deals others miss. He's essentially proven that with domain expertise (bankruptcy law), a contrarian framework (deep value in despised assets), and willingness to hustle (cold outreach, verification work), you can build a valuable business at the bottom of an institutional food chain. The game has scaled from $200k Mt. Gox claims to tens of millions in FTX exposure, all without raising a traditional fund or taking on overhead.