Bankruptcy Court Approves Compute North’s Reorganization Plan
Compute North announced its reorganization plan garnered court approval. The approval by the bankruptcy court judge came after the largest hosting firm in North America honored a $250 million settlement of secured debt in an agreement with 11 companies.
Downsized Scale of Compute North Post-restructuring
The approved reorganization plan is set to offer a recovery path for the defunct service provider for crypto mining. The approved plan will put Compute Northon on track, though at a downsized scale of its commanding presence in North America.
The reorganization plan reveals that Compute North sought bankruptcy protection upon discovering its inability to settle its debt obligations in September. The motion filed before bankruptcy indicated that the crypto miner concluded 13 asset sales.
In his address during the February 16 hearing, the Compute North lawyers indicated that four of the sales were major activities to settle the secured debt estimated at $250 million.
Retracing Compute North’s Operations
Judge Marvin Isgur admitted that the ruling was unpleasant to some stakeholders. The pronouncement of the Southern District of Texas judge prompted the crypto mining firm’s attorney to recite Hail Mary. The attorney lauded the approval to enable the firm to retrace its operations through the restructuring plan.
Compute North disclosed settling the debts it owed various firms to onboard them into the restructuring plan. Doing so was critical to avoid them initiating litigations in the future. Primarily, Marathon Digital Holdings accepted the $40 million offered on February 9 to the unsecured claim.
Acceptance of Restructuring Process
The firm’s attorney disclosed that 11 firms accepted the offers to their relatively minor claims. However, it took Compute North last-minute intervention to conclude three agreements with two offered to the customers.
Decimal Digital featured in three holdouts arising from the machines and hosting services ordered from the crypto mining firm.
The mining giant is set to recover its machines though incurring transport and packing fees expenses. The attorney added that Decimal is assuming a committee position similar to Touzi Capital to oversee the plan investment.
Corpus Christi Energy Park would retain a $5M unsecured claim arising for the contract to build the Texas-based mining infrastructure.
BitNile shook off the newcomer tag and claimed $20 million, where $18 million was for damages. The attorney revealed that BitNile lodged a claim alleging fraud from Compute North.
The miner alleges that Compute North failed to plug in the machines, thereby violating the deal concluded in the August deal. The BitNile secured a $1 million unsecured claim towards the voting purpose.
Establishing Litigation Trust to Conclude Ongoing Proceedings
The restructuring plan presented before the Texas-based bankruptcy court captures the final list and creditors’ claims categories. Compute North’s attorney indicated that the plan details a litigation trust tasked with sourcing funds from the existing cases. The successful execution of the litigation trust is crucial as it influences the division of the remaining assets among the claimants.
Compute North attorney disclosed that Generate Capital is set to assume two Texas-based sites set for management with the US Bitcoin Corp.
Foundry, a subsidiary of the Digital Currency Group, acquired two additional mining sites for the $10 million owed as an equipment loan.
The restructuring plan outlines that the remaining unsecured creditors will exercise ownership rights over various assets, including containers and transformers. The plan requires that the claimants would receive the disbursement of such assets. Lastly, the plan illustrates the establishment of trust that will oversee the closure of existing legal procedures.
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