Lending firm Generate Capital is buying up bitcoin mining hosting firm Compute North's stake in two mega-mining facilities for $5 million, Tuesday bankruptcy filings show.
Compute North, one of the largest bitcoin mining firms in the world, declared bankruptcy in late September, saying it can't fulfill debt obligations worth up to $500 million.
Generate Capital agreed in February to lend the hosting firm up to $300 million for the development of two sites, a 300 megawatt (MW) facility in Wolf Hollow, Texas, and a 100 MW one in Kearny, Nebraska, said Compute North's chief financial officer, Harold Coulby, in previous testimony. An entity called CN Pledgor LLC owns 100% of the Wolf Hollow and Kearney facilities through its total ownership of CN Borrower LLC , Coulby said.
According to purchase agreement, the lender was the only one to bid for CN Pledgor's equity of CN Borrower, and the court approved the sale.
Coulby claimed that, in July, Generate Capital "asserted several technical events of default" in order to take control of Compute North assets, triggering the miner's chapter 11 bankruptcy.
Fast forward to November, and Generate is fully buying out Compute North's sites for $5 million and is assuming several liabilities associated, including obligations to clients that host their machines at their sites, according to the agreement.
The process of connecting the Wolf Hollow plant to the Texas grid, managed by the Electricity Reliability Council of Texas, has not been completed, the agreement said.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.