Blockchain News

Restructuring Plan for Bankrupt Bitcoin Miner Core Scientific Set for September, Expects $46 Million Boost

In a recent development, Core Scientific, a bankrupt Bitcoin miner, announced its plans to finalize a restructuring plan by September. The company anticipates exiting bankruptcy proceedings with an additional $46 million, thanks to recent favourable market conditions. This news comes after Core Scientific’s improved liquidity position and subsequent plans to file a reorganization plan in the near future, as stated in a May 22 filing in a Texas Bankruptcy Court.

Core Scientific is actively negotiating the plan with key stakeholders and is striving to achieve consensus on the future shape of the restructured company post-bankruptcy. Chapter 11 bankruptcy allows businesses to continue operating while stakeholders work toward an agreed-upon restructuring plan. Measures such as downsizing business operations to reduce debt or liquidating assets to repay creditors may be involved in the restructuring.

The company credits several primary market factors for its improved liquidity position. Decreasing power costs, rising Bitcoin prices, and an increase in the blockchain’s hashrate have all contributed to this boost. When Core Scientific filed for bankruptcy on December 21, 2022, Bitcoin’s price stood at $16,904. Since then, it has soared by over 60%, currently resting at around $27,000. Moreover, power prices have decreased by 24% since the filing, while the network’s hashrate has surged by 54%.

Despite delays in the bankruptcy proceedings, Core Scientific estimates that it will have an additional $46 million in funds once the restructuring plan is finalized. Another significant windfall is expected from Celsius Network, a bankrupt crypto lender that Core Scientific claims owes them approximately $11 million. The two entities are currently engaged in a prolonged court battle that originated on October 19, 2022, when Core Scientific first accused Celsius of failing to pay its power bills.

As Core Scientific strives to navigate through bankruptcy proceedings, the company remains optimistic about its future prospects. With the favorable market conditions and potential windfalls, Core Scientific’s restructured form aims to emerge stronger and better positioned in the Bitcoin mining industry. The anticipated September deadline for finalizing the restructuring plan marks a crucial milestone for the company’s recovery, highlighting its determination to overcome adversity and capitalize on the positive momentum in the market.


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