The bankruptcy court has accepted a $20 million settlement between Core Scientific and its energy broker Priority Power Management.
Judge David Jones approved the transfer of equipment worth around $20.8 million from Core Scientific to Priority Power in a filing made on March 20 in the Southern District of Texas’s US Bankruptcy Court.
The firms were at odds over two mining operations in Texas that were supposed to receive a combined 1,000 megawatts of electricity to expand Core Scientific’s mining capability.
The company’s CEO Michael Bros said in a statement submitted on March 19 that the company hired Priority Power in June 2021 to manage, consult, and create infrastructure specifically to meet its energy demands “on a quick ramp-up timeframe.”
According to Bros, Priority Power “suffered huge losses” after Core Scientific ceased paying it in May 2022 because “it became evident that the Facilities would not get the projected power load.”
When Core Scientific filed for Chapter 11 bankruptcy in December of last year, Priority Power said that the company owed it almost $30 million for the work it had completed before the miner filed.
According to the judge’s ruling, Priority Power would get equipment from the now-bankrupt company valued at $20.8 million, including electrical equipment such as power transformers and breakers.
The agreement further states that Core Scientific “will promote” Priority Power “to any purchaser” of its Texas-based locations so that it may perhaps enter into an arrangement with the new owners for energy management and consultancy.
Also, the company would keep $514,000 that Priority Power made by reducing electricity for Core Scientific. Moreover, the miner will pay the company’s “legal fees and out-of-pocket expenses up to $85,000.”
Due to pressure from declining business earnings, low cryptocurrency prices, and legal expenses associated with the defunct cryptocurrency lender Celsius, Core Scientific filed for bankruptcy.
In February, Core and New York Digital Investment Group agreed to settle a $38.6 million debt by turning over more than 27,000 mining rigs that served as collateral.