Core Scientific will transfer equipment worth USD 20 million to settle the bankruptcy dispute
A $20 million settlement between Bitcoin (BTC) miner Core Scientific and its energy retailer Priority Power Management has been approved by the judge in Core Scientific’s bankruptcy proceedings.
In a filing with the United States Bankruptcy Court for the Southern District of Texas on March 20, Judge David Jones signed off on allowing Core Scientific to transfer about $20.8 million worth of equipment to Priority Power.
The companies had been in a dispute over two Texas-based mining facilities that were slated to receive 1,000 megawatts (MW) of power between them to increase Core Scientific’s mining capacity.
In a statement filed on March 19, Core Scientific CEO Michael Bros said it launched Priority Power in June 2021 to exclusively manage, consult and develop infrastructure to meet energy needs “on a short ramp-up schedule.”
However, Bros said that by May 2022 “it became clear that the facilities would not receive the expected power load” and Core Scientific stopped paying Priority Power as it “suffered significant losses”.
Priority Power then claimed that Core Scientific owed it about $30 million for work it had done before the miner filed for Chapter 11 bankruptcy last December.
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The judge’s decision means Priority Power will get $20.8 million worth of equipment from the now-bankrupt firm, including electrical equipment such as power transformers and switches.
The agreement also promises that Core Scientific “will introduce” Priority Power “to any acquirer” of its Texas sites, potentially entering into an energy management and consulting agreement with the new owners.
Priority Power will also get to keep $514,000 earned by reducing the power of Core Scientific. The miner will also reimburse the firm “for legal fees and expenses up to $85,000.”
Core Scientific filed for bankruptcy due to pressure from falling company revenue, low Bitcoin prices and legal costs against bankrupt crypto lender Celsius.
Core Scientific has been forced to hand over equipment before and in February struck a deal with New York Digital Investment Group (NYDIG) to pay off $38.6 million in debt by handing over more than 27,000 mining rigs used as collateral .
