Bitcoin miner Core Scientific files its Chapter 11 plan

A Chapter 11 plan for bankrupt bitcoin (BTC) mining company Core Scientific has been filed following Chapter 11 procedures.

the plan is It has been submitted In the US Bankruptcy Court for the District of Houston, Southern District of Texas. The plan has been negotiated with key stakeholders, and according to the filing, the company is “seeking to reach as much consensus as possible” on what the new Core Scientific will look like after it emerges from bankruptcy proceedings. there is

Crypto mining firm Core Scientific said it has seen increased liquidity since filing for Chapter 11 bankruptcy and is focusing on revising its business plan for a successful comeback. The company attributes its improved financial performance to higher Bitcoin prices, higher network hashrates, and lower energy costs.

In a Chapter 11 bankruptcy, a company remains in business until its stakeholders agree on a recovery plan that includes measures such as curtailing business operations to reduce debt and liquidating assets to repay creditors. can continue. A Chapter 11 bankruptcy plan is a formal document outlining how a company intends to recover and pay back its creditors.

The bankruptcy plan explained that on the effective date of the bankruptcy plan, holders of permitted occupied debtor (DIP) claims will receive full and final payment of their claims. They will either receive full cash or alternative treatment as agreed upon. In addition, any lien granted to secure the DIP claim will be terminated and the security interest in the company’s assets will be removed.

Core Scientific had been cleared by the Southern District of Texas Bankruptcy Court for a loan of up to $70 million from investment bank B. Riley, Inc., one of the company’s largest creditors. The loan was to be used to repay loans to existing debtors of bankrupt bitcoin miners, also from B. Riley.

Related: ‘Unfairly Enriched’ — Core Scientific Cancels $4.7 Million Claim From Celsius

Core Scientific filed for bankruptcy on December 21, 2022, citing declining revenue and low BTC price. This came shortly after creditors offered to help Core Scientific to avoid possible bankruptcy.

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