A BTC mining company in the U.S. has been ordered to liquidate its assets and shut down its operations. BCause Mining LLC has been in endless financial struggles which culminated in the company filing for bankruptcy earlier this year. And this week, a federal judge approved a motion that sought to convert the filing from a reorganization to a liquidation.
Based in the city of Virginia Beach, BCause launched with much hype, pledging to build the largest crypto mining operation in North America. As reported by local outlet The Virginia Pilot, the company even received $436,823 from the city in the form of a grant. It pledged to invest $64.8 million in the development of its mining facility.
The largest portion of the investment was put into mining equipment which was owned by other companies, the report stated. These companies would then pay over $1 million in monthly fees to BCause for hosting the machines.
These companies have yet to be paid their dues, the report revealed, with the creditors claiming that BCause owed them $13.3 million.
BCause filed for bankruptcy protection in April this year after WESCO Distribution, one of its primary vendors, won a lawsuit which allowed it to recover $1.9 million from BCause’s bank account.
The legal team representing WESCO asked the court to convert the reorganization case to liquidation, stating, “It should be apparent to the Court and other parties in this case, there is no hope of reorganization.”
Determined not to go down without exploring all the possible options, BCause previously suggested a plan to the court that involved the opening of a crypto exchange that could generate revenues for the firm. However, the plan involved raising additional funds from interested investors to establish the exchange.
With the liquidation, the company will lay off its 27 full-time staff as well as four additional part time employees.
Virginia Beach intends to file a claim in the bankruptcy court, the city’s spokesperson Julie Hill told the publication. It, however, hasn’t determined how much it will seek. Even if it does, the city’s claim will have to take a backseat as it would be considered an unsecured creditor.
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