According to recent reports, Core Scientific, a struggling bitcoin miner, has submitted a chapter 11 bankruptcy plan to the Houston Division of the Southern District of Texas Bankruptcy Court.
Core Scientific’s Bankruptcy Plan
In the petition, the company states that it is “seeking to build as much consensus as possible” over the future appearance of Core Scientific once it emerges from bankruptcy.
The plan also stated that holders of permitted debtor-in-possession claims would be fully and completely satisfied with their claims. The company’s assets will no longer be subject to any liens that were created to secure the DIP claims.
Making a Successful Return
The company claims that after declaring Chapter 11 bankruptcy, its liquidity has increased and it is presently focusing on modifying the way it operates in order to successfully make a return.
The firm credited rising Bitcoin prices, a faster network hash rate, and lower energy costs for its better cash flow.
Core Scientific Bankruptcy
The BTC miner made every attempt to prevent the bankruptcy filed in December, but in the end, it had to declare liquidation because of declining revenue and low BTC pricing. Notably, there wasn’t enough money to meet the company’s operating expenses.
Additionally, the miner’s exposure to the indebted Celsius Network and rising power costs also played a role in its demise. At the beginning of this year, it had shut down over 37,000 mining rigs belonging to the Celsius.
Amid all the stress a crypto lender and investment company called B. Riley assured to finance Core Scientific’s operations up to the tune of $72 million, which caused the miner’s shares to increase by 200%.
The loan was going to be used to repay the debtor-in-possession finance loan from B. Riley that was already due on behalf of the insolvent Bitcoin miner.
The momentary uproar had died once the stock had seen a steady decline. However, the development shows that in spite of the bankruptcy, the corporation intends to keep operating rather than liquidating them.