Bitcoin mining company Rhodium Enterprises has initiated Chapter 11 bankruptcy proceedings in the U.S. Bankruptcy Court for the Southern District of Texas, disclosing potential liabilities of up to $100 million.
Filing for Bankruptcy
On August 24, Rhodium Enterprises filed for Chapter 11 bankruptcy, including six subsidiaries: Rhodium Encore, Jordan HPC, Rhodium JV, Rhodium 2.0, Rhodium 10MW, and Rhodium 30MW. The company's debts are estimated between $50 million and $100 million, while its assets range from $100 million to $500 million.
Financial Troubles
The filing follows reports of financial troubles, including a failure to repay $54 million in loans due in July. In 2021, Rhodium had secured $78 million in loans for its subsidiaries. Disagreements over two proposed debt restructuring plans led to the current bankruptcy filing. Chapter 11 will allow Rhodium to reorganize its debts and continue operations while negotiating new repayment terms.
Industry Context and Future Prospects
Rhodium has been affected by the recent bear market, facing declining miner profits exacerbated by the April Bitcoin halving event and rising energy costs. Rhodium has engaged Quinn Emanuel Urquhart & Sullivan for bankruptcy counsel and Province for restructuring advice. Similar bankruptcy filings have occurred in the sector; for example, Core Scientific filed under Chapter 11 in December 2022 and emerged from bankruptcy in early 2024.
The bankruptcy process will allow Rhodium Enterprises to reorganize its financial obligations and continue operations while addressing current financial challenges.
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