Compute North Files Petition For Chapter 11 Bankruptcy in Texas

Compute North, a Bitcoin (BTC) mining data center firm has filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of Texas in a similar fashion as bankrupt crypto lender Voyager Digital which is now insolvent.

According to the newly appointed Chief Financial Officer (CFO) of the mining host firm Harold Coulby, one of the factors which contributed to the petition was the problems that the firm had dealing with one of its major lenders Generate Capital. 

Generate Capital, a key creditor of the BTC mining hosting provider had successfully issued a loan of $300 million to Compute North. Most of the loan was utilized in running its operations in Nebraska and Texas.

Out of that issued credit, $101 million is yet to be refunded to the creditor. When Compute North was unable to refund, Generate Capital as part of its voting rights later ceased the firm’s assets in form of two mining sites. 

This act, therefore, relinquished Generate Capital’s right to be counted amongst Compute North’s creditors.

Compute North Owes Creditors $128.3M

Other underlying reasons were the prevalent extreme market conditions, as well as supply chain disruption. The firm is seeking protection from its creditors while trying to stabilize the business through a restructuring process. At Present, Compute North owes its creditors, lenders, and service providers a long-term debt of $128.3 million. 

About $99.8 million of that debt is in the form of a senior secured promissory note to renewable energy provider NextEra.

Another $21 million, also in a senior secured promissory note to BTC miner Marathon Digital Holdings. The remainder of its debt ($7.5 million) is owed to a subsidiary company of the Digital Currency Group, Foundry as an equipment financing loan.

While many have discovered ways to scale through the crypto winter which started as a result of the collapse of Do Kwon’s TerraUSD and LUNA, many are still drowning.

Prices of many digital assets have continued to plummet alongside the increasing cost of energy for mining. Mining pool Poolin recently halted withdrawal on its wallet platform as it tries to avoid forced liquidation. Although it plans to resume its trading activities in less than two weeks.