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- 1 The plan, referred to as a joint Chapter 11 plan of reorganization, is awaiting approval and is pending a vote before parties can approve or disapprove it.
- 2 The company credited rising Bitcoin prices, a high network hash rate, and lower energy costs for improved financial performance.
- 3 The plan will provide “complete and final” satisfaction to debtor-in-possession claims.
Core Scientific, an insolvent Bitcoin miner, has filed a potential Chapter 11 reorganization plan with a bankruptcy court.
The Recognition Plan By Core Scientific Isn’t Approved Yet
According to a document filed with the bankruptcy court on June 21, related to the insolvent Bitcoin miner Core Scientific, a potential Chapter 11 reorganization plan has been filed.
The restructuring plan is awaiting approval. As of the most recent filing, the plan is referred to as a “joint chapter 11 plan of reorganization.” The same provision also implies that the plan must still be put to a vote before claimants and other parties can approve or disapprove it.
The plan was submitted to the Houston Division of the Southern District of Texas Bankruptcy Court. According to the filing, the corporation is “seeking to build as much consensus as possible” regarding how a new Core Scientific might appear after emerging from its bankruptcy proceedings. The strategy was developed with important stakeholders.
The business said that since declaring Chapter 11 bankruptcy, its liquidity had increased. It is now concentrating on revising its business strategy in order to successfully exit bankruptcy. The company credited rising Bitcoin prices, a high network hash rate, and lower energy costs for its improved financial performance.
A disclaimer states that the file has not yet received bankruptcy court approval and that the content in the plan is subject to change.
The idea will, however, provide “complete and final” satisfaction to people who have debtor-in-possession claims if it is implemented. These claims may be exchanged for money or other options that the claim holders have expressly agreed upon in writing.
The document refers to several different kinds of claims and interests, including but not restricted to claims backed by loans for mining equipment. According to information made public by CNBC in late 2022, Core Scientific was unable to pay debts on lent mining equipment while senior security note holders retained the majority of the company’s debt.
Additionally, the document outlines how the claims may be resolved, Core Scientific may continue to exist as a legal business, distributions will be provided, and disputes will be resolved. In December 2022, Core Scientific made its initial bankruptcy filing. More than a thousand creditors and liabilities amounting to $10 Billion were disclosed by the corporation.
The U.S. District Court for the Southern District of Texas Houston Division is where the company’s bankruptcy procedures are now being handled.
While the bankruptcy proceedings were going on, Core Scientific had a positive cash flow at the time and is still in business. The company reported that on June 20, it mined 31 BTC ($934,000) during its most recent 24-hour reporting period.
On June 20, the company’s shares (CORZQ) increased by 12.84%.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
