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The restructuring plan for bankrupt Bitcoin (BTC) mining company Core Scientific could be completed by September, and the company expects to complete the process with an additional $46 million due to recent favorable market conditions.
In a May 22 filing in the Texas Bankruptcy Court, lawyers for Core Scientific said their liquidity position has improved significantly since the company filed for bankruptcy, and as a result, it plans to submit a reorganization plan in the near future.
The plan is currently being discussed with key stakeholders, and according to the statement, the firm is “seeking to reach as much consensus as possible” on what the new Core Scientific will look like once it emerges from bankruptcy.
Chapter 11 bankruptcy allows the firm to continue operating until the parties concerned can agree on a restructuring plan, which may include measures such as reducing business operations to reduce debt or liquidating assets to repay debt to creditors.
The firm cited declining electricity costs, rising Bitcoin prices, and an increase in blockchain hash rate as the main market drivers driving its liquidity.
On December 21, 2022, when Core Scientific filed for bankruptcy, the price of Bitcoin was $16,904, according to CoinMarketCap. Since then, the price has risen over 60% and is currently around $27,000.
In addition, according to the filing, electricity prices have decreased by 24% since the petition was filed, and the network hashrate jumped by 54%.
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Core Scientific estimates that as a result of more favorable market conditions, it will have $46 million in additional funds after the restructuring plan is completed, despite delays in bankruptcy proceedings.
The miner is also expecting a significant windfall from the Celsius Network, which claims a bankrupt cryptocurrency lender owes it about $11 million.
The two firms are currently involved in a lengthy legal battle that began on October 19, 2022, when Core Scientific first charged Celsius with non-payment of electricity bills.
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