- Core Scientific stated that its liquidity has been boosted since filing for Chapter 11 bankruptcy.
- It cited rising Bitcoin prices, higher network hash rate and lower energy costs as reasons for its improved financial fortunes.
Prominent Bitcoin miner Core Scientific has filed its Chapter 11 bankruptcy plan. The firm archived the plan in U.S. Bankruptcy Court for the Southern District of Texas Houston Division.
Holders of permitted DIP (debtor-in-possession) claims would obtain full and final satisfaction of their claims on the effective date of the bankruptcy plan, according to the bankruptcy plan. They will either receive full cash payment or alternative treatment as agreed. All lines awarded to secure DIP claims are also cancelled, clearing the secured interest in the company’s assets.
The Bitcoin miner has also been negotiating with key stakeholders as part of the plan. The company is trying to build as much consensus as possible about what a new Core Scientific company would look like after exiting bankruptcy proceedings, according to the filing.
A Chapter 11 bankruptcy stipulates that a company must continue until stakeholders agree on a restructuring plan, which may include actions such as reducing business operations to reduce debt or liquidating assets to repay creditors. The formal document outlines how the company expects to reorganize and repay its creditors.
Bitcoin Miner is getting ready for comeback
Core Scientific mention that its liquidity has improved since filing for Chapter 11 bankruptcy. The company said it was focusing on reworking its business plan to make a successful comeback. It cited rising Bitcoin prices, higher network hash rate and lower energy costs as reasons for the company’s improved financial fortunes.
The bankruptcy court promised Core Scientific is allowed to borrow up to $70 million from investment bank B. Riley, one of the mining company’s largest creditors. The loan would be used to repay the mining group’s current financing loan, which had also been provided by B. Riley.
Bitcoin miner declared bankruptcy in December 2022, citing declining revenues and low BTC prices. The petition came just days after a creditor pledged to help Core Scientific avoid bankruptcy.
