Tuesday, November 29, 2022

Compute North Receives First-Day Motion Approval From Bankruptcy Court

Bitcoin mining hosting company Compute North has received approval from the bankruptcy court to maintain some of its operations. Therefore, Compute North can pay its insurance obligations, operate its cash management system, and file a list of its creditors. 

This approval follows an earlier submission of a petition for bankruptcy in a United States Bankruptcy Court for the Southern District of Texas. The presiding judge over the bankruptcy process Judge Marvin Isgur signed three orders to ensure the continuation of the firm’s operations. 

Also, Compute North was approved to maintain its previous bank accounts and business forms. Although, this is only limited to banks that have the permission to honor checks issued before Compute North filed for bankruptcy. Exclusively, these banks are to receive authorization from only the company and the bankruptcy court.

Any impending transaction involving other companies which were supposed to have been completed before bankruptcy can continue, says the document. Nevertheless, Compute North has not received direct orders to do so from the court even though the approval has come. The company received Judge Isgur’s approval to create a list of thirty of its top creditors. 

In addition to that, the contact details of its employees, directors and contractors are to be edited. While all these have been set in motion, the date for the bankruptcy case hearing will be fixed. Showing some form of optimism, Compute North believes that the path and strategy to employ to ensure repayment of the debt will be issued.

Compute North Files For Chapter 11 Bankruptcy

Initially, the Bitcoin (BTC) mining hosting provider filed for a Chapter 11 bankruptcy with the court on Friday. This was the same bankruptcy that troubled crypto lender Voyager Digital filed for when it sensed insolvency. 

The Chief Financial Officer of the firm, Harold Coulby attributed its situation to troubles it was having with Generate Capital. Generate Capital is known to be one of its key creditors. Other issues were the prevalent crypto winter and supply chain disruption. Currently, Compute North has a long-term debt of $128.3 million owed to three major entities. 

NextEra, a renewable energy provider is owed $99.8 million in the form of a senior secured promissory note. In the same form, BTC miner Marathon Digital Holdings is owed $21 million. While the last chunk of the debt is owed to Foundry, a subsidiary of Digital Currency Group. It was given as an equipment financing loan.

Victoria Nye
A Blockchain columnist who is enthusiastic about developing a network interface between the real world and the cryptosphere.

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