The liquidation plan of the insolvent hosting provider Compute North has been approved by the bankruptcy court for the Southern District of Texas.
After realizing it couldn't pay its payments, Compute North filed for bankruptcy protection in September. The mining business has executed 13 asset transfers, four of which were major, which have paid off all of its secured debt, which was $250 million.
Some of the company's assets are still available, despite the fact that the majority of them have already been liquidated in recent months; the proceeds will now be primarily distributed to unsecured creditors.
Compute North has made settlements with a number of their debtors to enlist these businesses in the plan and stop further legal action. One of them is market leader Marathon Digital Holdings, which accepted the plan on February 9 in exchange for agreeing to a general unsecured claim for $40 million. Compute North had to settle extremely minor claims with an extra 11 companies in order for the strategy to succeed.
Also, the business sold US Bitcoin Corp's 50% interest in a Texas wind power plant with a capacity of 280 megawatts. US Bitcoin Corp recently announced a merger with miner Hut 8. Among the additional clients were Generate Capital, Crusoe Energy Systems, and Foundry.
As Compute North's attorneys revealed a last-minute declaration that will allow the mining hosting firm to move through with its restructuring plan, Judge Marvin Isgur of the Southern District of Texas said: "Nobody was going to like what I was getting about to do."
The three last-minute agreements were with BitNile, Corpus Christi Energy Park, and Decimal Digital.
The plan approves the final list and classification of creditors' claims, and a litigation trust is created to keep seeking money from ongoing lawsuits. This in turn will determine how the remaining claimants will split up Compute North's remaining assets.
The remaining unsecured creditors will hang onto the remaining assets, such as transformers and containers, and will then distribute them among the claimants. A lawsuit trust will be established to halt ongoing legal proceedings.
Although Core Scientific declared bankruptcy in December, it has actually adopted the opposite strategy, securing extra cash to keep operations going.