Core Scientific debtors petition bankruptcy court to approve new president

#Blockchain #Mining

The debtors behind bankrupt cryptocurrency mining firm Core Scientific filed a motion for the approval of hiring a permanent president.

In an April 10 filing with United States Bankruptcy Court for the Southern District of Texas, Core Scientific said it was addressing “a gap in the Debtors’ management team” prior to the firm filing for bankruptcy in December 2022. The debtors appointed Adam Sullivan, a managing director at investment banking firm XMS Capital Partners, to assume the role of president amid the company’s bankruptcy proceedings.

“Mr. Sullivan is no stranger to the digital asset mining space and has extensive experience in the digital asset investment banking industry,” said the filing. “[He] will principally work on financial and strategic matters, including working with customer, supplier, and creditor relationships and assisting with the negotiation of a plan of reorganization in his capacity as a member of the management team.”

According to the debtors, Sullivan will receive a base salary of $500,000 as well as a guaranteed annual bonus of at least $500,000 in 2023 in his role as president. Soon-to-be former Core Scientific president Todd DuChene will stay on as the firm’s chief legal officer as well as assume the role of chief administrative officer.

Prior to its bankruptcy filing, Core Scientific reported it expected its “existing cash resources will be depleted by the end of 2022,” citing the low price of Bitcoin (BTC), increased electricity costs, and litigation with crypto lender Celsius. The mining firm had hosted more than 37,000 rigs for Celsius and alleged in court filings the crypto lender had failed to pay its power bills, contributing to its liquidity issues.

Related: Core Scientific to transfer $20M of equipment to settle bankruptcy dispute

Though moving through bankruptcy proceedings, the Texas firm continues to mine BTC despite disruptions to its supply of rigs. The bankruptcy court approved Core Scientific handing over more than 27,000 miners to the New York Digital Investment Group in February as part of a deal to pay off roughly $38 million in debt.

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