Bitcoin miner Core Scientific files for bankruptcy plan
- Core Scientific stated that its liquidity got a boost since filing for chapter 11 bankruptcy.
- It cited rising Bitcoin prices, increased network hash rate, and lower energy costs as reasons for its improved financial fortune.
Prominent Bitcoin miner Core Scientific has filed its Chapter 11 bankruptcy plan. The firm filed the plan in the U.S. Bankruptcy Court for the Southern District of Texas Houston Division.
Holders of allowed debtor-in-possession (DIP) claims would obtain complete and final satisfaction of their claims on the bankruptcy plan’s effective date, as per the bankruptcy plan. They will either receive full payment in cash or alternative treatment as agreed upon. Any lines granted to secure DIP claims will be cancelled as well, erasing the secured interest in the company’s assets.
The Bitcoin miner has also negotiated with key stakeholders as part of the plan. The company is seeking to build as much consensus as possible about how a new Core Scientific firm would appear after exiting from bankruptcy procedures, as per the filing.
A Chapter 11 bankruptcy provides for a company to continue operating until stakeholders reach an agreement on a restructuring plan, which could include actions like decreasing corporate activities to decrease debt or liquidating assets to repay creditors. The formal document outlines how the company expects to reorganize and repay its creditors.
Bitcoin Miner readying itself for comeback
Core Scientific stated that its liquidity got boosted since filing for Chapter 11 bankruptcy. The company said that it was focusing on reworking its business plan to make a successful comeback. It cited rising Bitcoin prices, increased network hash rate, and lower energy costs as reasons for the company’s improved financial fortune.
The bankruptcy court granted Core Scientific permission to borrow up to $70 million from investment bank B. Riley, one of the mining firm’s largest creditors. The loan would be used to repay the mining group’s current debtor-in-possession financing loan, which was also provided by B. Riley.
Bitcoin miner declared bankruptcy in December 2022, citing declining revenue and low BTC pricing. The petition occurred just days after a creditor promised to assist Core Scientific in avoiding bankruptcy.