BTC block reward miner Compute North’s liquidation plan has been approved by a federal judge in Texas.
Compute North filed for bankruptcy last September, citing nearly $500 million in debt. It blamed its woes on the bear market and the rising price of power. Before its collapse, it was the largest operator of data centers for block reward miners in North America, serving Marathon Digital (NASDAQ: MARA), HIVE Blockchain (NASDAQ: HIVE), Compass Mining, and more.
In the latest development, Marvin Isgur, a federal judge in the U.S. Bankruptcy Court for the Southern District of Texas, has approved the company’s liquidation plan.
The company revealed in court that of the over $400 million it owed to its creditors, it had managed to settle $250 million through selling most of its assets.
This included forfeiting its Texas-based 280 MW wind power facility shares to Generate Capital, one of its largest lenders. Generate then relegated management of the facility to U.S. Bitcoin Corp, which has since merged with Canadian miner Hut 8.
According to James Grogan, an attorney with Paul Hastings LLP, Compute North’s liquidation plan involved getting support from creditors and settling with those who opposed the plan.
“We had overwhelming support from our general unsecured creditors, well in excess of 90% in the amount of unsecured claims,” the attorney told one outlet.
One of the key companies that Compute settled with was Marathon Digital. Court documents show that Marathon agreed to an unsecured claim of $40 million. A further 11 unnamed companies also agreed to the plan.
The plan had been held up by a few creditors who sued the company for a wide range of allegations, ranging from fraud to breach of contract. One of them, BitNile Holdings, sued Compute for $18 million in damages. It also alleged fraud, claiming Compute failed to plug in its mining rigs as per their contract.
After the mass selloff, Compute now only has ASIC machines and electrical equipment to its name, attorney Grogan revealed.
In the past year, block reward miners have faced their biggest test yet, and many have collapsed under the bear market. Tougher tests lie ahead, however, with Bitcoin halving next year expected to take out another round of companies relying solely on block rewards.
“Any miners that are struggling now will not be able to survive the halving,” Jeff Burkey, VP of business development at Digital Currency Group-owned Foundry, admits.
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