Core Scientific, a US-based bitcoin mining giant, is filing for Chapter 11 bankruptcy protection in Texas as the company seeks alternatives to repay its debts with creditors, CNBC reports, citing a person familiar with the matter.
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As of press time, Core Scientific no public statements regarding the bankruptcy. The person with knowledge noted that although the Texas-based bitcoin mining company is still making positive cashflow, that cash is not enough to repay the financing debt owed on equipment it was leasing.
Despite the bankruptcy, Core Scientific reportedly plans to save the company and continue to operate normally while reaching a deal with senior security noteholders.
The filing comes shortly after Core Scientific's creditor, B. Riley Financial, offered the crypto mining giant a $72 million non-cash payment. The creditor said that the deal was proposed on "favorable terms," providing the company with enough capital to achieve profitability.
In mid-November, a Core Scientific shareholder filed a class action lawsuit against the company for allegedly concealing adverse financial factors that led to losses for investors. According to the plaintiff, Mei Pan, the company made "false or misleading statements" between March 3 and October 28, 2022.
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