Compute North Receives Judge Approval to Commence With Liquidation Plans

Bankrupt Bitcoin (BTC) mining data center Compute North has received authorization from the United States Bankruptcy Court for the Southern District of Texas to carry out its liquidation plan.

The approval was issued by Judge Marvin Isgur who has been responsible for the mining hosting provider’s bankruptcy proceedings. With this latest development, Compute North will finally be going through its restructuring process.

“Nobody was going to like what I was getting ready to do,” Judge Isgur pointed out while he gave his verdict on the final reorganization plan on Thursday.

Compute North filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas last year. At the time, financial problems with one of its major creditors Generate Capital was listed as a contributor to the bankruptcy filing. Compute North had an outstanding debt of $300 million owed to Generate Capital which it used to run its operations in Nebraska and Texas.

Additionally, the BTC mining hosting provider was a victim of the harsh market conditions of 2022 that wiped off $2 trillion from the crypto industry. In total, it owed creditors, lenders, and service providers a long-term debt of $128.3 million. Foundry, a subsidiary company of the Digital Currency Group and BTC miner Marathon Digital Holdings were also part of Compute North creditors.

Compute North Sells Off Assets to Settle Creditors

In no distant time, a first-day motion was approved by the federal judge for the beleaguered data center, giving it the permission to conduct cash management systems, pay insurance obligations and file a list of its creditors amongst other things. Compute North then put up some of its assets for sale including 11 containers to Crusoe Energy System, another Bitcoin mining company. 

The agreement which was approved by the court meant that Crusoe Energy would buy the assets for $1.55 million with each container going for $140,636.36. Some other assets are left and intend to be sold to cover claims by unsecured creditors. According to James Grogan, an attorney with the law firm Paul Hastings, Compute North has reached an agreement with those creditors who filed objections.

“We had overwhelming support from our general unsecured creditors, well in excess of 90% in the amount of unsecured claims.”