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Core Scientific Inc., a blockchain, artificial intelligence (AI) hosting, transaction processing, and application development firm headquartered in Austin, Texas, is expected to come out of bankruptcy. This news emerged after the company announced its agreement in principle on the terms of its Chapter 11 bankruptcy global settlement plan.
On Thursday, Dec. 21, Core Scientific said it is looking to get out of bankruptcy in mid to late January 2024. This date is a year after the company collapsed along with other high-profile firms in the cryptocurrency and blockchain sector.
Core Scientific’s Bankruptcy
As per Reuters, the blockchain firm filed for Chapter 11 bankruptcy protection in December 2022, and in its filing, it cited dropping bitcoin prices and increasing energy costs for bitcoin mining as two of the main reasons. The company added that one of its biggest clients, Celsius Network, also has a large unpaid balance.
All of these, combined with other external market factors, have led to the downfall of Core Scientific’s business. The company got the most significant blow after the FTX crypto exchange filed for bankruptcy in November of the same year.
Agreement with Stakeholders and Terms of Settlement
It appears that Core Scientific has succeeded in its recovery efforts after a year of trying to resolve its problems. The company said this week it reached an in-principle agreement with all of its primary stakeholders related to the terms of a global settlement. This is big news because this process will allow the firm to get back on the business.
“The global settlement removes key hurdles to our anticipated emergence from Chapter 11 in January,” Core Scientific’s chief executive officer, Adam Sullivan, said in a press release. “With our team highly focused on operational excellence, a post-emergence pathway to de-lever our balance sheet and a plan for continued growth in 2024 and beyond, we are excited to pursue the opportunities ahead of us in the new year.”
Photo by: Core Scientific Website
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