In a move to address its financial woes, Core Scientific, a Bitcoin mining company, has submitted a potential Chapter 11 reorganization plan to the bankruptcy court on June 21. The plan, which is yet to receive approval, marks a crucial step for the company as it seeks to navigate its path out of bankruptcy.
The submitted document describes the plan as a “joint chapter 11 plan of reorganization.” However, it emphasizes that the plan still requires votes from claim holders and other relevant parties for acceptance or rejection. The filing explicitly states that the bankruptcy court has not yet sanctioned the document and that its contents are subject to change.
If the reorganization plan is approved and put into action, it will provide debtor-in-possession claim holders with “complete and final” satisfaction. These claims can be redeemed for cash or alternative options that have been mutually agreed upon in writing by the claim holders.
The filing highlights the inclusion of various types of claims and interests, notably mining equipment lender-secured claims. Core Scientific had previously struggled to meet its obligations concerning the debts incurred from loaned mining equipment. Reports from CNBC in late 2022 revealed that a significant portion of the company’s debt was held by senior note holders with security interests.
Beyond addressing claims, the document outlines the settlement process, the future of Core Scientific as a corporate entity, the distribution of assets, and the protocol for handling disputes that may arise during the reorganization process.
Core Scientific originally filed for bankruptcy in December 2022, with staggering liabilities estimated to be as high as $10 billion. Additionally, the company faced the challenge of managing over 1,000 creditors, highlighting the scale of the financial crisis it was grappling with.
The filing of the Chapter 11 reorganization plan signals Core Scientific’s determination to restructure its affairs and emerge from bankruptcy with a viable and sustainable business model. However, until the plan is approved by the bankruptcy court and successfully executed, the future of the company remains uncertain.
Source: https://azcoinnews.com/bankrupt-bitcoin-miner-core-scientific-submits-chapter-11-reorganization-plan.html
