Bitcoin mining company Rhodium Enterprises has voluntarily filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Texas. They’ve disclosed that their liabilities could reach up to $100 million.
The company submitted a filing that includes six subsidiaries: Rhodium Encore, Rhodium JV, Rhodium 10MW, Rhodium 2.0, Rhodium 30MW, and Jordan HPC. The document shows that the company owes between $50 and $100 million, while it estimates its assets to be between $100 and $500 million.
The company’s bankruptcy comes after earlier signs of financial trouble within the company. Reports indicate that Rhodium Enterprises missed a $54 million loan payment to its lenders in July. Back in 2021, it secured $78 million in loans to support its subsidiaries.
Two debt restructuring plans were proposed before the deadline, but stakeholder disagreements caused the default. Now, the company will reorganize its debts under Chapter 11 bankruptcy while continuing operations.
Bitcoin miners struggle amid market and financial challenges
Other Bitcoin mining companies have faced similar challenges. Core Scientific, for example, filed for Chapter 11 bankruptcy in Dec. 2022 due to dropping cryptocurrency prices and rising energy costs. They emerged from bankruptcy in early 2024.
However, Rhodium hit hard by the recent bear market, faced a lawsuit in 2023 from competitor Rio Platforms. Rio seeks to recover over $26 million in unpaid fees for Rhodium’s use of Riot’s Whinstone Bitcoin mining facilities.
Additionally, Bitcoin miners are feeling the pinch after the halving event in April, as a recent JPMorgan report highlights. The reward cut has tightened profit margins, and rising electricity costs add to their financial struggles.
The firm has chosen the law firm Quinn Emanuel Urquhart & Sullivan to handle its bankruptcy case and has hired Province as its restructuring advisor.
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