Core Seeks to Resolve $330M Claims
Key agreements to bring relief as Core nears bankruptcy exit
As Core Scientific aims for its bankruptcy exit, the mining giant has reached agreements with two of its hosting clients. If approved, these agreements would resolve unsecured claims against itself totaling $330 million.
Core filed a second amended reorganization plan on Sept. 11, outlining – among other issues – how it plans to settle Foundry’s $18 million claim. This claim arose from Foundry’s sale of 2,106 S19XPs to Core in early 2022, valued at $21 million in Core’s common stocks. As these stocks dropped 86% when the lockup period expired in July 2022, Core owed Foundry $18 million in cash.
As part of the plan to settle these claims, Core will continue to host the 2,106 S19XPs but will share the net mining profit with Foundry for one year, after which ownership of the miners will transfer to Foundry.
Additionally, on Sept. 15, Core filed a motion seeking the bankruptcy court’s approval for a settlement with Celsius, one of its major hosting customers also undergoing Chapter 11 proceedings. Celsius had previously filed a $312 million proof-of-claim against Core due to a hosting dispute.
Under the terms of the settlement, both parties have agreed to release their claims against each other, contingent on Core selling its Cedarvale site in Texas to Celsius for $14 million in cash.
Core has confirmed that the sale of the Cedarvale site will not disrupt its current mining operations or its post-emergence growth plan. Additionally, Celsius will contract USBTC, which recently finalized its merger deal with Hut8, to build the infrastructure at the Cedarvale site.
These agreements are the latest additions to a series of settlements that Core has reached with various construction suppliers, as previously discussed. After a few delays, the hearing for Core’s Chapter 11 reorganization plan is scheduled for Sept. 27.
Per TheMinerMag’s calculation, Core's share of the Bitcoin production market has dropped by 35% this year, falling from 5.1% in January to 3.3% in August. This decline is due to the continuous expansion of operating hashrate by its primary competitors.
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