Bitcoin Miner Rhodium Files for Bankruptcy in Texas

August 27, 2024 02:58 PM AEST | By Team Kalkine Media

Google News:

Bitcoin Miner Rhodium Files for Bankruptcy in Texas — Image source: shutterstock

Recent News

Kalkine : ASX 200 Energy Share WDS Gains Strength After Project Progre...

Kalkine: ASX 200 Steady as Sydney Stock Exchange Sees Zero Activity

Kalkine : ASX 200, Hang Seng, Nikkei 225: Index Momentum Cools as Resi...

Kalkine: ASX 200 Stable Amid Tax Policy Dispute Over Bracket Indexatio...

Rhodium Enterprises, a Bitcoin mining firm, has filed for voluntary bankruptcy under Chapter 11 in the United States Bankruptcy Court for the Southern District of Texas. The bankruptcy petition, submitted on August 24, reveals that the company’s liabilities range between $50 million and $100 million, while its total assets are estimated to be between $100 million and $500 million. The filing includes six subsidiaries: Rhodium Encore, Jordan HPC, Rhodium JV, Rhodium 2.0, Rhodium 10MW, and Rhodium 30MW.

The decision to file for bankruptcy follows financial difficulties experienced by Rhodium Enterprises. The company was unable to repay $54 million in loans due to lenders in July, despite having previously raised $78 million in loans in 2021 for its subsidiaries. Prior to the bankruptcy filing, the company had proposed two debt restructuring plans; however, disagreements among stakeholders led to a default.

Under Chapter 11, Rhodium Enterprises will be allowed to reorganize its debts while continuing operations. This process will enable the company to negotiate a revised repayment plan. Such a restructuring approach has been employed by other {Bitcoin} (BTC) mining companies facing financial stress. For example, Core Scientific filed for Chapter 11 in December 2022 due to declining cryptocurrency prices and increased energy costs but emerged from bankruptcy in early 2024.

Rhodium Enterprises has been significantly impacted by the broader downturn in the cryptocurrency market. In 2023, competitor Rio Platforms initiated legal action against Rhodium to recover over $26 million in unpaid fees related to the use of Riot’s Whinstone Bitcoin mining facilities. Additionally, a recent report by JPMorgan highlighted a sharp decline in Bitcoin miner profits due to the halving event in April, which reduced Bitcoin mining rewards, combined with rising electricity costs.

To navigate its bankruptcy proceedings, Rhodium Enterprises has appointed Quinn Emanuel Urquhart & Sullivan as general bankruptcy counsel and Province as restructuring adviser.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.