Bitcoin mining firm Core Scientific filed a disclosure statement for its third-amended bankruptcy recovery plan on Monday, which incorporates key terms from its Restructuring Term Sheet filed in late October.
The new filing features a concrete timeline for how the firm will gain support for the plan from key stakeholders and emerge from bankruptcy before January 15.
Final Stages of Bankruptcy
Per the Monday filing, the debtors plan to “move forward expeditiously” with gathering votes and confirming its plan to keep administrative costs to a minimum.
A hearing on the conditional approval of Core Scientific’s plan will occur on Tuesday. Holders of claims or interest will then have until December 13 to vote on the plan, with another hearing to confirm final approval of the disclosure statement on December 22.
After that, the plan is slated to go effective between January 2 and January 13, 2024.
“The [Restructuring Support Agreement] Parties have agreed to use reasonable efforts to emerge from chapter 11 on or before January 15, 2024,” read the disclosure statement.
Multiple stakeholders are involved in the voting process, including convertible noteholders, secured mining finance lenders, the committee of unsecured creditors, equity holders, and investment bank B. Riley – the largest holder of unsecured claims in the company.
Core Scientific received $100 million in equity financing from B. Riley in June of last year. After going bankrupt in December, the mining company approved a $70 million loan from B. Riley in March to help the firm get back on its feet.
According to the filing, the bankruptcy plan currently lacks support from both the committee of unsecured creditors and B. Riley. Core Scientific intends to keep negotiating with both parties to try and reach a global settlement.
“To the extent any Class votes to reject the Plan, the Debtors will seek confirmation of the Plan over such rejection under the “cramdown” provisions of the Bankruptcy Code,” the company added.
What’s The Plan?
Core Scientific’s plan values the company at $1.5 billion and is designed to substantially reduce its debt while preserving over 240 jobs at the company.
Some of its promises include issuing $150 million in new notes and $260 million in new convertible notes. The new notes will carry a 12% interest rate and will mature four years after the plan becomes effective.
Meanwhile, convertible notes give Core the option to repay creditors at either 10% in cash, or at 6% in cash and another 6% in common stock. These notes will mature in five years.
Core Scientific was one of the largest Bitcoin miners worldwide in January 2023, accounting for over 5% of Bitcoin’s hash rate alone.
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