Court approves more first-day motions in Compute North bankruptcy case
Quick Take
- Compute North received approval from the bankruptcy court to maintain certain operations including paying for insurance and maintaining its bank accounts.
- The company filed for Chapter 11 bankruptcy last week.
Bankrupt bitcoin mining hosting provider Compute North received approval today to operate its cash management system, pay insurance obligations and file a list of its creditors.
Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas (Houston) signed three more orders enabling the firm to continue key operations amid the Chapter 11 process. The approvals came after a hearing on Friday rolled over certain first-day motions in the wake of Compute North's bankruptcy declaration.
The company received approval to maintain its existing bank accounts and business forms, with banks permitted to honor checks written before the firm entered bankruptcy when directed by Compute North and the bankruptcy court.
The firm is also approved “but not directed,” to continue intercompany transactions, according to the documents. That includes transactions within the company that would have been usual prior to filing for Chapter 11 protection.
Isgur also approved a revised order directing Compute North to file a list of its top 30 creditors. The firm is also approved to redact the address information of its employees, directors, and contractors. The subsequent filings will also set key dates for the case and start the firm on a path to considering how to repay certain debts.
Compute North filed for Chapter 11 bankruptcy last Thursday, stating in a document that “after any administrative expenses are paid, no funds will be available for distribution to unsecured creditors.”
The company's Chief Financial Officer Harold Coulby explained in his declaration that the crypto market downturn impaired the firm's liquidity in addition to a soured relationship with its largest funding source, infrastructure investment firm Generate Capital.
The company raised $385 million earlier this year and an additional $25 million last year. According to bankruptcy documents, just over $100 million of the $300 million line of credit extended by Generate Capital remains outstanding.
Compute North has between $100 million-$500 million both in estimated liabilities and estimated assets, according to the initial bankruptcy filing.
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