Bitcoin Miner Core Scientific Reaches $20 Million Settlement In Bankruptcy Case

Mar. 22, 2023
Bitcoin Miner Core Scientific Reaches $20 Million Settlement In Bankruptcy Case

In the bankruptcy proceedings of Core Scientific (CORZ), the presiding judge has approved a settlement with the Bitcoin miner’s sole negotiator for energy contracts. As per the settlement, Core Scientific has agreed to transfer electrical equipment worth over $20 million to the supplier.

The firms were at odds over two mining operations in Texas that were supposed to receive a combined 1,000 megawatts (MW) of power to expand Core Scientific’s mining capability.

Executive of Core Scientific Michael Bros stated in a statement filed on March 19th that Priority Power was hired by Core Scientific in June 2021 to solely manage, consult, and build infrastructure to meet its energy demands “on a quick ramp-up timeframe.”

Bitcoin Miner Core Scientific New Settlement Promises

The Bros stated that Core Scientific stopped paying Priority Power in May 2022 due to significant losses. It also became clear that the facilities would not receive the anticipated power load.

Then, Priority Power said that Core Scientific owed it $30 million for its services completed before the miner filed for Chapter 11 bankruptcy in December of last year. Core Scientific reported financial hardship in a filing with the US Securities and Exchange Commission on October 26th.

Low Bitcoin prices, increased power costs, and rising Bitcoin hash rates were the main reasons behind the company’s problems. Additionally, the bankruptcy of cryptocurrency lender Celsius eliminated Core Scientific’s debts.

In February, Core Scientific agreed with New York Digital Investment Group (NYDIG) to pay off a $38.6 million debt by turning over 27,000 mining rigs used as security. Core Scientific had previously been ordered to turn over equipment.

A $20 million worth of equipment, including power transformers and breakers, will be delivered to Priority Power. The judge’s ruling resulted in this outcome following the now-bankrupt company.

Related Reading | Ethereum Co-Founder Shares Views On Multi-Sig & Social Recovery Wallets

According to the agreement, Core Scientific will introduce Priority Power to potential buyers of its Texas locations. This will allow Priority Power to explore the possibility of providing energy management and consultancy services to the new owners.

Moreover, $514,000 that was made by reducing electricity for Core Scientific will be retained by Priority Power. The miner will reimburse the company “for attorney’s fees and out-of-pocket costs up to $85,000.”

Ammar Raza

Associate editor
Skilled in crafting compelling content, with a deep enthusiasm for blockchain technology. I offer precise and easily comprehensible perspectives on cryptocurrencies, decentralized finance, and the ever-evolving landscape. Count on me as a reliable resource to remain informed about the latest advancements in the world of crypto.