Core Scientific moves for September bankruptcy exit, expects $46M boost
A restructuring plan for bankrupt Bitcoin (BTC) miner Core Scientific could be finalized by September and it expects to exit proceedings with an additional $46 million due to recent favorable market conditions.
In a May 22 filing in a Texas Bankruptcy Court, Core Scientific’s lawyers said its liquidity position has improved considerably since it filed for bankruptcy and as a result, it plans to file a reorganization plan in the near future.
The plan is currently being negotiated with key stakeholders, and according to the filing, the firm is “seeking to build as much consensus as possible” about how a new Core Scientific would look after emerging from its bankruptcy proceedings.
A Chapter 11 bankruptcy allows a firm to continue operating until stakeholders are able to agree on a restructuring plan which could involve measures such as the downsizing of business operations to reduce debt or the liquidation of assets to repay creditors.
The firm pointed to decreasing power costs, increasing Bitcoin prices and an increase in the blockchain’s hashrate as the primary market factors contributing to its liquidity boost.
On Dec. 21, 2022, when Core Scientific filed for bankruptcy, Bitcoin’s price was $16,904, according to CoinMarketCap. Since then, the price has shot up by over 60%, currently sitting at around $27,000.
Additionally, power prices have decreased by 24% since the petition date according to the filing, while the network hashrate has jumped by 54%.
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As a result of more favorable market conditions, Core Scientific estimates it will have an additional $46 million in funds once a restructuring plan is finalized, despite delays in the bankruptcy proceedings.
The miner is also expecting a significant windfall from Celsius Network claiming the bankrupt crypto lender owes it some $11 million.
The two firms are currently engaged in a lengthy court battle that began on Oct. 19, 2022, when Core Scientific first accused Celsius of failing to pay its power bills.
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