Core Scientific’s bankruptcy case judge approved a settlement with the miner’s exclusive energy contract negotiator, Priority Power Management. Under the settlement, Core Scientific will transfer more than $20 million worth of electrical equipment to the supplier. This dispute relates to two facilities in west Texas that were supposed to bring 1 gigawatt (GW) of power capacity to Core Scientific’s portfolio of assets. Priority Power Management was hired as the miner’s “exclusive energy manager and consultant” to negotiate power contracts and build out the two west Texas sites. The settlement will help Core Scientific move forward with its plans to expand its portfolio of assets.
Core Scientific, a cryptocurrency miner, stopped making payments to Priority Power Management in May 2022 after it became clear that the two west Texas facilities would not receive the anticipated power load. In October 2022, Core Scientific halted debt payments due to running low on cash, and in December, it filed for Chapter 11 bankruptcy protection. Priority Power Management claimed it was owed about $30 million in the proceedings. This case highlights the importance of having a reliable power source for cryptocurrency miners, as well as the potential financial risks associated with the industry.
Priority Power Management has secured a $20.8 million claim in the bankruptcy of a debtor. This claim is secured by the transfer of the debtor’s interest in the equipment. The claim is given priority over other types of claims in bankruptcy. Federal Judge David Jones of the Southern District of Texas approved the deal at a Monday hearing. Priority Power Management will now receive the full amount of the claim. Priority Power Management and Core Scientific have reached a deal in which Priority Power Management will loosen its exclusivity in procuring power agreements for Core Scientific. Core Scientific will reimburse Priority Power Management $85,000 of legal and out-of-pocket expenses, and Priority Power Management will keep $514,000 it earned by power curtailment for the miner. The two facilities are up for sale, and Core Scientific will introduce Priority Power Management to any acquirer so that they can negotiate a similar deal. The equipment in question cost around $23 million, with $17 million already in Priority Power Management’s possession. This deal will help Core Scientific save money and ensure that Priority Power Management is compensated for its services.
Core Scientific, a leading provider of cryptocurrency mining services, has announced that its settlement with Priority Power Management will not affect its ongoing sale process. Core Scientific had previously announced that it would sell two facilities with up to 1 GW of power capacity as part of its bankruptcy proceedings. The miner’s spokesperson said that the settlement with Priority Power Management will not interfere with the sale process. Core Scientific is committed to providing its customers with the best possible mining services and is confident that the sale process will be successful.
