The bankruptcy plan states that holders of approved DIP claims will be fully compensated for their claims on the effective date of the plan.
Bankrupt Bitcoin miner Core Scientific has submitted a Chapter 11 plan in the U.S. bankruptcy court for the Southern District of Texas Houston Division. The plan was developed through negotiations with important parties involved, and the company aims to gather widespread agreement on the future structure of the reorganized Core Scientific after the bankruptcy process.
Core Scientific, a cryptocurrency miner, has experienced improved liquidity following its Chapter 11 bankruptcy filing. The company is now concentrating on restructuring its business strategy for a successful recovery. Core Scientific credits its enhanced financial situation to the rise in bitcoin prices, a higher network hash rate, and lower energy expenses.
Under Chapter 11 bankruptcy, a company can keep functioning while working with stakeholders to create a restructuring plan. This plan may involve reducing debt by scaling down operations or selling assets to repay creditors. The Chapter 11 bankruptcy plan is a formal document that explains how the company will reorganize itself and repay its debts.
The bankruptcy plan states that on the day it takes effect, people who are owed money by the company (known as debtor-in-possession claims) will be fully paid off. They will either receive the full amount in cash or an agreed-upon alternative arrangement. Moreover, any rights to claim the company’s assets as collateral for these debts will be canceled.
Core Scientific, a bankrupt Bitcoin miner, obtained approval from the bankruptcy court in Texas to borrow up to $70 million from B. Riley, one of its major creditors. This loan would be used to repay the company’s existing debtor-in-possession financing loan, which was also provided by B. Riley.
This development occurred shortly after another creditor offered assistance to Core Scientific to help them avoid potential bankruptcy.
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
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