Core Scientific Eyes September Bankruptcy Exit with $46M Boost

Key Takeaways
  • Core Scientific, a Bankrupt Bitcoin miner, revises its restructuring plan and aims to finalize it by September.
  • Favorable market conditions have boosted Core Scientific's liquidity position, with an estimated additional $46 million expected upon plan completion.
  • The company is engaged in a legal battle with Celsius Network, claiming the lender owes them around $11 million in unpaid debts.
05-24-2023 By: Sudeep Saxena
Core Scientific Eyes

Core Scientific, a Bankrupt Bitcoin miner, has revised its restructuring plan and expects to finalize it by September. 

The company anticipates exiting the bankruptcy proceedings with an additional $46 million due to favorable market conditions.

According to a filing made on May 22 in a Texas Bankruptcy Court, Core Scientific's liquidity position has significantly improved since the initial bankruptcy filing. As a result, the company intends to submit a reorganization plan in the near future. The plan is currently under negotiation with key stakeholders, with a focus on garnering consensus regarding the future structure of Core Scientific after emerging from bankruptcy.

Under Chapter 11 bankruptcy, a company can continue its operations while stakeholders work towards reaching a consensus on a restructuring plan. This plan may involve measures such as downsizing business operations to reduce debt or liquidating assets to repay creditors.

Core Scientific attributes its enhanced liquidity to several market factors. These include decreasing power costs, rising Bitcoin prices, and an increase in the blockchain's hash rate. When Core Scientific filed for bankruptcy on December 21, 2022, the price of Bitcoin was $16,904. Since then, the price has surged by over 60%, currently hovering around $27,000. Additionally, power prices have declined by 24% since the filing, while the network hash rate has increased by 54%.

Core Scientific Expects $46M Boost and Pursues $11M Claim in Bankruptcy Restructuring

As a result of these more favorable market conditions, Core Scientific estimates that it will have an additional $46 million in funds once the restructuring plan is finalized, despite the delays in the bankruptcy proceedings.

Furthermore, Core Scientific is anticipating a significant windfall from Celsius Network, as it claims the bankrupt crypto lender owes them approximately $11 million. The two companies are presently engaged in a lengthy court battle that originated when Core Scientific accused Celsius of failing to settle its power bills on October 19, 2022.

In summary, Core Scientific is taking advantage of improved market conditions to revise its bankruptcy restructuring plan. The company expects to emerge from bankruptcy with a substantial increase in funds. Additionally, it is pursuing a legal claim against Celsius Network for unpaid debts.

Also read- Ledger Pauses Key Recovery Service and Commits to Open-Source Code

WHAT'S YOUR OPINION?
Related News
Related Blogs