Cryptocurrency Miner Core Scientific Nears Bankruptcy Exit Through Global Settlement

According to Coincu, cryptocurrency miner Core Scientific is expected to exit bankruptcy in January 2024 after reaching a global settlement with key stakeholders. The Austin-based company secured preliminary agreements with major parties, facilitating a consensual reorganization plan and hastening its exit from Chapter 11 bankruptcy. Core Scientific is poised to emerge from bankruptcy in mid-to-late January, following a challenging period marked by the drop in Bitcoin prices and escalating energy costs for mining. Last year, Core Scientific's bankruptcy, exacerbated by debt owed by Celsius Network, a major client in the US cryptocurrency loan industry, had significant ripple effects on the market. Core Scientific CEO Adam Sullivan revealed that a preliminary agreement with key stakeholders, including the Ad Hoc Noteholders Group, Unsecured Creditors Committee, Equity Committee, and B. Riley (the Company’s Debtor in Possession lender), has been reached. This global settlement, described by Sullivan as a critical milestone, paves the way for a consensual plan of reorganization and expeditious exit from Chapter 11. Sullivan emphasized that the resolution removes key hurdles for the company's anticipated emergence from Chapter 11 in January. With a renewed focus on operational excellence, a post-emergence strategy to de-lever the balance sheet, and growth plans for 2024 and beyond, Core Scientific looks forward to a promising future. To facilitate final updates to the Chapter 11 Plan and Disclosure Statement, the company plans to request a modification of certain court dates and deadlines. It anticipates filing a motion for the Court's approval, seeking extensions related to voting on the plan, and filing objections. In conjunction with the global settlement, the deadline for participation in the Equity Rights Offering has been extended to December 28, 2023. Core Scientific aims to conclude its restructuring process and reposition itself for growth as it navigates the evolving cryptocurrency landscape in the coming year.