- The company filed for bankruptcy with the Bankruptcy Court of the Southern District of Texas Houston Division in the United States.
- The Bitcoin mining company has also negotiated with significant stakeholders as part of the plan.
- The Bitcoin mining company stated that its liquidity has increased since the bankruptcy filing.
A leading Bitcoin mining company has filed for Chapter 11 bankruptcy with the Bankruptcy Court of the Southern District of Texas Houston Division in the United States.
Core Scientific Files for Bankruptcy
A leading Bitcoin mining company, Core Scientific, has filed for bankruptcy. The company filed for bankruptcy with the Bankruptcy Court of the Southern District of Texas Houston Division.
According to the bankruptcy plan, allowed secured creditors will receive full and final satisfaction of their claims as of the effective date of the bankruptcy plan. They will either receive full payment in cash or be treated in accordance with an agreed alternative transaction. Loans provided to secure DIP (debt-in-possession) claims will also be canceled to secure claims on the company’s assets.
The Bitcoin mining company has also negotiated with significant stakeholders as part of the plan. The company aims to secure as many agreements as possible on how a new Core Scientific company will look after emerging from bankruptcy proceedings.
A Chapter 11 bankruptcy allows a company to continue its operations until stakeholders reach an agreement on a restructuring plan. This includes a plan that may involve reducing company operations to reduce debt or liquidating assets to repay creditors. The official document explains how the company will be restructured and how it will repay its debts.
The Company Prepares for a Successful Comeback
Core Scientific, the Bitcoin mining company, stated that its liquidity has increased since the bankruptcy filing. The company expressed its focus on restructuring its business plan for a successful comeback. Increasing Bitcoin prices, increasing network hash rate, and low energy costs were cited as reasons for the rising costs.
The bankruptcy court granted Core Scientific permission to borrow up to $70 million from investment bank B. Riley, one of the largest creditors of the mining group. This loan will be used to repay the existing debt-in-possession financing provided by B. Riley.
