Holders of approved DIP claims under the bankruptcy plan will receive full and final satisfaction of their claims on the effective date of the plan.
Bankrupt bitcoin miner Core Scientific has filed a Chapter 11 plan under Chapter 11 proceedings.
The plan has been filed in the U.S. Bankruptcy Court for the Southern District of Texas in Houston. As stated in the filing, the company is “seeking to achieve as much consensus as possible on how the new Core Scientific will handle its bankruptcy proceedings.” The plan was consulted with key stakeholders.
Cryptocurrency miner Core Scientific said it has increased its liquidity since declaring Chapter 11 bankruptcy and is focusing on revising its business strategy to succeed. The company cited higher bitcoin prices, higher network hashrate and lower energy costs as reasons for its improved financial performance.
The company can continue to operate until stakeholders can agree on a restructuring plan through Chapter 11 bankruptcy law. The plan may include reducing business operations to reduce debt or liquidating assets to repay creditors. A formal document outlining a company’s plan for reorganization and debt repayment is called a Chapter 11 bankruptcy plan.
Under the scheme, holders who are allowed to hold debtor (DIP) claims will receive full and final satisfaction of their claims on the effective date of the scheme. They will receive full cash payment or an agreed alternative. In addition, the security interest in the Company’s assets will be eliminated as a result of the termination of any liens granted to secure the DIP claims.
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Ad Core Scientific has received permission from the Bankruptcy Court for the Southern District of Texas to obtain a loan of up to $70 million from investment bank B. Riley, one of the company’s largest creditors. The debtor-in-possession loan already owned by the bankrupt bitcoin miner is also from B. Riley and will be repaid with this loan.
RELATED: ‘Unjust enrichment’: Core Scientific dismisses Celsius’ $4.7M claim. On December 21, 2022, Core Scientific declared bankruptcy due to declining revenue and a BTC stock price as low as $28,839. This occurred shortly after creditors provided Core Scientific with assistance to avoid bankruptcy.