Core Scientific announced that the rights of the creditors in the bankruptcy plan it presented will be fully and ultimately met.
The plan submitted by the company was filed in the United States Bankruptcy Court for the Houston Division of the Southern District of Texas. According to the filing, the firm is trying to build as much consensus as possible on what a new Core Scientific will look like after it comes out of bankruptcy proceedings.
Core Scientific Focuses on Renewing Its Business Plan
Core Scientific says it has seen a surge in liquidity since its Chapter 11 bankruptcy filing and is focusing on revamping its business plan to make a successful comeback.
The company attributed its improved financial performance to higher Bitcoin prices, increased network hashrate and lower energy costs. Chapter 11 bankruptcy allows the firm to continue operating until stakeholders agree on a restructuring plan, which may include measures such as downsizing business operations to reduce debt or liquidating assets to repay creditors. The Chapter 11 bankruptcy plan refers to the official document that outlines how the company plans to reorganize itself and repay its creditors.
In its application, Core Scientific announced that the claims of the claimants will be covered in full.
According to the statement, these people will receive their payments in cash or by an alternative agreed method. In addition, all mortgages issued to secure DIP claims will be terminated and secured interest on the company’s assets will be removed. Core Scientific, the investment bank from the Southern District of Texas bankruptcy court, one of the company’s largest creditors B.Riley He had received permission to obtain a loan of up to $70 million from The loan in question will be used to pay off the current indebted financing loan that the bankrupt Bitcoin miner also received from B.Riley.
Core Scientific filed for bankruptcy on December 21, 2022, due to falling revenues and low profitability.
