Core Scientific is slowly moving toward the end of its bankruptcy proceedings.
Core Scientific, the bankrupt Bitcoin (BTC) mining company, has submitted its Chapter 11 plan, marking a significant step forward in its insolvency proceedings.
The plan was officially registered with the United States Bankruptcy Court for the Southern District of Texas Houston Division.
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The filing is allegedly the result of discussions with key stakeholders. As per the filing, the company aims to attain broad consensus on the appearance and functioning of Core Scientific following its exit from bankruptcy proceedings.
Since filing for Chapter 11 bankruptcy, Core Scientific reported increased liquidity and is strategizing to relaunch its business for a triumphant return. The company attributed this promising financial upswing to the rise in Bitcoin prices, an augmented network hash rate, and diminishing energy expenses.
Earlier, Core Scientific received the green light from the bankruptcy court to secure a loan of up to $70 million from investment bank B. Riley, one of the firm's largest creditors. The loan was intended to settle the existing debtor-in-possession financing loan from the same bank, B. Riley.
A company under Chapter 11 bankruptcy is allowed to keep functioning until a restructuring plan receives consensus from stakeholders. This strategy may involve actions like scaling down business activities to decrease debt or selling assets to repay creditors.
Core Scientific initially sought bankruptcy protection on December 21st, 2022, citing a decline in revenue amidst low BTC prices. This move came on the heels of a creditor's proposal to help Core Scientific evade potential bankruptcy.
Based on the newest reports, Core Scientific hopes to finalize its restructuring plan and emerge out of bankruptcy by September 2023.
Core Scientific's filing of its Chapter 11 plan underscores the firm's commitment to overcoming its financial crisis and charting a path for recovery, offering a glimmer of hope to its stakeholders.
