American cryptocurrency mining company Rhodium has filed for bankruptcy in the Southern District Court of Texas. According to documents, the company has debts ranging from $50 million to $100 million. This is not the first instance of financial difficulties for Rhodium. Back in 2023, Riot Platforms filed a lawsuit against the company for $26 million, and in July of this year, Rhodium failed to repay $54 million in loans.
Restructuring Attempts and Bankruptcy
Before filing for bankruptcy, Rhodium attempted to develop two debt restructuring proposals. However, the company failed to garner support from all stakeholders. As a result, Rhodium was forced to resort to bankruptcy proceedings. The filing also lists 6 Rhodium subsidiaries: Rhodium Encore, Jordan HPC, Rhodium JV, Rhodium 2.0, Rhodium 10MW, and Rhodium 30MW.
Prospects and Legal Support
For the bankruptcy proceedings, Rhodium has chosen the law firm Quinn Emanuel Urquhart & Sullivan as its general bankruptcy counsel. Restructuring advisors will be specialists from the firm Province. It’s important to note that the bankruptcy is filed under Chapter 11 of the U.S. Bankruptcy Code, which will allow the company to restructure its debts and continue operations. This approach has been used before in the crypto industry: in 2022, the mining firm Core Scientific also used a bankruptcy filing to protect itself from creditors.
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