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During the first-court orders, the Judge allowed Compute North to maintain its existing banks and continue its operations.
On Monday, September 26, the bankrupt crypto mining hosting provider Compute North secured the court’s approval to operate its cash management system as well as pay its insurance obligations.
Yesterday, Judge Marvin Isgur of the US Bankruptcy Court for the Southern District of Texas (Houston), signed an additional three orders. This was to allow the firm to continue its operations amid the Chapter 11 bankruptcy.
As a result, Compute North will be now able to maintain its existing bank accounts and business forms. The banks also get the approval to permit all checks written before the firm entered bankruptcy. According to the “court documents,” the firm also gets the approval to continue with intercompany transactions. This involves transactions within the company that would have been usual before filing for bankruptcy.
However, Judge Isgur has asked Compute North to file a list of its top 30 creditors. During the first-day motions, Compute North also gets the approval to redact the address information of its directors, employees, and contractors.
The court will soon decide on key dates for subsequent filings. It will also help Compute North to start on its path of repaying the debts.
Compute North Chapter 11 Bankruptcy
Last week, the crypto mining hosting provider Compute North filed for Chapter 11 bankruptcy owing to a severe meltdown in the crypto space. In its document last Thursday, Compute North stated that “after any administrative expenses are paid, no funds will be available for distribution to unsecured creditors”.
Harold Coulby, the company’s Chief Financial Officer explained in his declaration that the downturn in the crypto market has impaired the firm’s liquidity. Besides, Compute North’s relationship with its largest funding source, infrastructure investment firm Generate Capital, was also on the decline.
Earlier this year, compute North had raised $500 million in addition to $25 million raised last year. The bankruptcy documents show that of the $300 million line of credit extended by Generate Capital, only $100 million remains outstanding. As per the initial bankruptcy filing, Compute North has between $100 million-$500 million both in estimated liabilities and estimated assets.
Compute North’s data centers provide services for some of the biggest mining companies in the United States. Their list of clients includes Compass Mining, Marathon Digital, Hive Blockchain, Atlas Mining, The9, and Bit Digital, among others.