Bankrupt crypto mining data center Compute North has resorted to selling its assets and facilities. Generate Capital which was once a lender of the Bitcoin (BTC) mining hosting firm, will be purchasing two mega mining facilities for $5 million. Already, a new filing has been made to the court in charge of Compute North bankruptcy proceedings.
According to the filing, a deal has been reached as the company’s counsel proposed the sales of all its mining facilities in Wolf Hollow, Texas, and Kearney, Nebraska.
Already, the assets in Wolf Hollow and Kearney belong to another entity leaving only Compute North facilities in Texas and Nebraska available. Presently, the United States Bankruptcy judge in the Southern District of Texas, Houston Division has approved the sales to Generate Capital.
Based on the purchase agreement, it was discovered that Compute North did not receive any qualifying bid for the facilities, hence the auction was canceled. As only Generate Capital signified interest in the sales, Compute North went ahead to finalize the agreement with the lender.
Therefore, the lender will assume ownership of these facilities as well as the responsibilities and obligations which come with them. Although, the agreement does not include assets of third parties hosted on Compute North’s facilities. For now, nothing has been said concerning a merger or restructuring plans from Generate Capital following the sales.
Generate Capital Contributed to Compute’s Bankruptcy
There exist a possibility that the deal may not pull through, especially as Harold Coulby, the Chief Financial Officer at Compute North claims that the lender was partly the cause. In his argument, he outlined that Generate Capital leveraged “several technical events of default” which led to the dissolution of the agreement along with its funding.
Consequently, Compute North was unable to continue funding in-progress data centers leading to the Chapter 11 bankruptcy which it filed in September. After the bankruptcy filing, the court granted the mining data center a few first-day motions to enable it to satisfy some obligations including operating its cash management systems, paying insurance obligations, and filing a list of its creditors.
Markedly, Compute North still has other creditors to settle. No deal has been finalized in respect to this committee of creditors.