Crypto mining company Core Scientific has emerged from bankruptcy, caused by the recent recovery in Bitcoin prices.
The firm filed for Chapter 11 protection in December 2022, causing a broad decline in digital asset markets last year, which felled major players like FTX and Celsius Network.Â
However, Bitcoin has recovered from below $17,000 to over $43,000. This price boost and lower energy expenses threw a rescue to Core Scientific.
It was able to strike deals with creditors to eliminate around $400 million of its debt in exchange for new equity stakes. This allowed the mining outfit to have its Chapter 11 exit plan approved on January 17th by Judge Christopher Lopez.
The judge remarked that it is rare for shareholders to retain any value through bankruptcy. Yet Core Scientific’s investors can participate in a $55 million rights offering as part of the reorganization.
Another $80 million financing facility from bondholders further aided the change plan. Over 95% of general unsecured creditors ultimately voted to back the proposal.
Lopez stated that the agreement provides huge recovery for creditors while preserving jobs. Core Scientific believes its shares could return to the Nasdaq stock exchange next week.
The outcome is a major success compared to other crypto bankruptcies, which largely wiped out investors.
While crypto markets remain low, the Core Scientific case displays their volatility. Its Chapter 11 filing coincided with plunging digital asset prices in 2022. Yet the dramatic rally by Bitcoin created an unexpected change.
Also Read: Core Scientific’s New Bankruptcy Plan Unveiled Pre-CourtÂ
