Bitcoin mining firm Rhodium Enterprises has voluntarily filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas, listing liabilities up to $100 million.
The filing, submitted on August 24, includes six subsidiaries: Rhodium Encore, Jordan HPC, Rhodium JV, Rhodium 2.0, Rhodium 10MW and Rhodium 30MW. The company’s debts are reported to range between $50 million and $100 million, with total assets estimated between $100 million and $500 million.
Rhodium’s financial struggles have been evident in recent reports. In July, the company, which owns Rhodium Encore and Rhodium 2.0, reportedly defaulted on $54 million in loans. Rhodium had raised $78 million in loans for its subsidiaries back in 2021. Although two debt restructuring proposals were made before the default, disagreements among stakeholders ultimately led to the filing. The Chapter 11 bankruptcy will allow Rhodium to reorganize its debts while continuing operations, providing an opportunity to negotiate a revised repayment plan.
Rhodium isn’t not the only Bitcoin mining company facing financial difficulties. Core Scientific, another Bitcoin mining firm, filed for Chapter 11 in December 2022 due to declining cryptocurrency prices and rising energy costs. Core Scientific emerged from bankruptcy in early 2024.
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Rhodium, like many others in the industry, has been severely impacted by the recent bear market. In 2023, competitor Rio Platforms sued Rhodium Enterprises to recover over $26 million in unpaid fees related to the use of Riot’s Whinstone Bitcoin mining facilities. Additionally, a JPMorgan report noted that Bitcoin miner profits have significantly declined following the April halving event, which reduced mining rewards and increased financial pressures due to higher electricity prices.
Rhodium has appointed Quinn Emanuel Urquhart & Sullivan as its general bankruptcy counsel and Province as its restructuring adviser.
Cre: cointelegraph.
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