Compute North files for chapter 11- Here’s everything you need to know
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Compute North has become the latest crypto company to succumb to the ongoing bear market. Compute North has one of the largest cryptomining data centers archived Voluntary Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of Texas.
More about Compute North
Compute North had a network of data centers to host Bitcoin mining companies and served customers in the blockchain, cryptocurrency mining and distributed computing space by providing sustainable and efficient computing services. The company has a significant presence in the states of Nebraska, North Carolina and Texas.
CEO Dave Perrill has stepped down, although he remains on the company’s board. At the same time, Compute North COO Drake Harvey has been appointed CEO of the company.
Chapter 11 filing
The bankruptcy has revealed that the Minnesota-based company owes up to $500 million to about 200 creditors. The value of the company’s assets is estimated at 100–500 million dollars.
The Chapter 11 bankruptcy procedure allows the company to continue operations and business to reduce debts. Compute North will likely take this time to stabilize its operations and develop a strategic restructuring plan.
Rising energy costs and a ruthless bear market are to blame for the company’s problems. According to Bloomberg reportLocal regulations in the state of Texas prevented Compute North from financing a brand new mining facility with 40,000 mining machines with a capacity of 280 megawatts.
The plant was supposed to power one of the company’s partners, Marathon Digital. Power outages and heat waves in Texas only made the situation worse. These factors have contributed to the company’s plight.
Statements of partner companies
Compute North’s hosting partners have processed the bankruptcy application. Marathon Digital informed to its users on Twitter that Compute North’s bankruptcy will not affect their mining operations. “We are in contact with the hosting provider and will monitor their progress as they work through this process,” the tweet continued.
Compass Mining, another of Compute North’s partners, informed their Twitter community that they closely followed the development of the latter. “Compute North staff advised us today that the bankruptcy filing should not disrupt the business.” they added.
Earlier this year in February Count North boat $385 million Series C funding round. The round included $85 million in fundraising together with Generate Capital and Mercuria. Generate Capital also provided a $300 million debt financing facility to finance the company’s development of new data centers in the country.