Core Scientific, the bankrupt miner of Bitcoin, recently filed for its Chapter 11 bankruptcy plan. The plan was initially filed in the United States Bankruptcy Court for the Southern District of Texas Houston Division.
This plan was further negotiated with certain key stakeholders, and the filing claimed that the firm was trying to build as much consensus as possible- about how a new mining platform would look after it came out from its bankruptcy proceedings.
The company further mentioned that it had also clocked in a boost in its liquidity since it filed for Chapter 11 bankruptcy, and was now focused on revamping the business plan it had of making a successful comeback. The company later attributed its improved performance to higher prices of Bitcoin, reduced costs of energy, and increased network hash rate.
Core Scientific Could Be Filing For A Chapter 11
If Core Scientific did file for a Chapter 11 bankruptcy, it would allow the firm to continue operating until the stakeholders agreed on a complete restructuring plan, which would then involve the measures such as downsizing business operations in order to reduce debt or liquidating the assets to repay the creditors.
The bankruptcy plan also refers to the formal document that would outline how the company intends on reorganizing itself, as well as repaying its creditors. It was further explained that the holders of allowed debtor-in-possession claims would also be receiving full and final satisfaction of their claims.
Core Scientific, interestingly, had already received permission from the bankruptcy court that they could take a loan of around $70 million from B. Riley, one of the biggest creditors of the company. The loan would then be used to pay off the bankrupt miner’s existing debtor-in-possession financial loan, which also comes from B. Riley.