 Bitcoin miner Rhodium files for bankruptcy in Texas court 
2024-08-27

Bitcoin mining firm Rhodium Enterprises has filed for voluntary bankruptcy under Chapter 11 in the United States Bankruptcy Court for the Southern District of Texas, revealing liabilities of up to $100 million.
The filing was submitted on Aug. 24 and includes six subsidiaries — Rhodium Encore, Jordan HPC, Rhodium JV, Rhodium 2.0, Rhodium 10MW and Rhodium 30MW. According to the document, the company’s debts range between $50 million and $100 million, while its total assets are estimated between $100 million and $500 million.Cointelegraph
Rhodium’s bankruptcy follows previous reports of financial distress under the company’s umbrella. Rhodium Enterprises, which owns Rhodium Encore and Rhodium 2.0, reportedly failed to repay $54 million in loans owed to lenders in July. In 2021, Rhodium raised $78 million in loans for its subsidiaries.
Two debt restructuring proposals were reportedly made prior to the deadline, but disagreements among stakeholders triggered the default. Under Chapter 11 voluntary bankruptcy, the company will be able to reorganize its debts while continuing operations, allowing it to negotiate a repayment plan under revised terms.
Other Bitcoin BTCUSD mining companies have sought similar protection in the past. Core Scientific, for instance, filed for Chapter 11 in December 2022, citing falling cryptocurrency prices and higher energy costs. The company emerged from bankruptcy in early 2024.
Rhodium is one of the crypto miners severely affected by the last bear market. In 2023, competitor Rio Platforms filed a lawsuit against Rhodium Enterprises to recover more than $26 million in unpaid fees related to the use of Riot’s Whinstone Bitcoin mining facilities.
In addition, Bitcoin miner profits have sharply declined due to the halving event in April, according to a recent JPMorgan report. The reduction in Bitcoin miner rewards following the halving has squeezed profit margins, while higher electricity prices further strain miners’ financial performance.
Rhodium has selected law firm Quinn Emanuel Urquhart & Sullivan to act as general bankruptcy counsel and Province to act as restructuring adviser.
Asia Express: Bitcoin miners steamrolled after electricity thefts, exchange ‘closure’ scam