Core Scientific's creditors are now move to seize the company's assets.
Core Scientific Inc. filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Delaware. The Company also announced that it had reached an agreement with certain of its creditors on a restructuring plan.
Under the terms of the restructuring plan, Core Scientific's creditors will receive equity in the reorganized company in exchange for forgiving some of the debt owed to them. The Company's current shareholders will be completely wiped out.
The restructuring plan still needs to be approved by the bankruptcy court, but if it is, Core Scientific will be able to reduce its debt burden and continue operating as a going concern. However, there is no guarantee that the plan will be approved or that the Company will be able to successfully restructure its business and emerge from bankruptcy.
Core Scientific's financial troubles began months ago and it has been struggling to stay afloat since then. The Company has been unable to generate enough revenue to cover its costs and has been burning through cash at an alarming rate. As a result, it has been forced to take out loans from creditors in order to keep operating.
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It is helpful to tell us about the company in such reports. Apparently Core Scientific presented itself as blockchain infrastructure. They engaged in blockchain mining, blockchain hosting and development.
Your article says that the investors will lose their investment and the creditors would receive any assets. It would be interesting to know the creditors. Are the creditors a bank, a private equity firm, or what?