Core Scientific, a crypto hosting and mining firm (CORZ), has said that it will pursue what it feels Celsius Mining, a mining affiliate of the crypto lender, owes it. CORZ is prepared to legally fight Celsius Mining’s claims that the earlier went against bankruptcy terms and breached their hosting protocols by unjustly trying to ignore power charges and failing to deploy mining machines on time.
In the U.S. Securities and Exchange Commission (SEC) Wednesday filing, Core Scientific said it “intends to defend its interests vigorously,” and it has hired legal advisors to help with the issue about Celsius Mining.
The Crypto hosting firm provides hosting services to Celsius Mining, for which, per the firm, Celsis Mining owes it around $5.4 million. Together with Celsius Network, its leading company, Celsius Mining filed for Chapter 11 bankruptcy protection in July in the U.S Bankruptcy Court for the Southern District of New York.
Is Core Scientific Against the Bankruptcy Protection Services?!
Celsius stated that Core Scientific was going against the automatic stay that Chapter 11 bankruptcy protection provides by enforcing actions and starting other legal proceedings against Celsius Mining. Besides, Chapter 11 bankruptcy protection prevents creditors from any enforcement actions or beginning or continuing further legal proceedings.
While disagreeing with Celsius Mining’s allegations, Core Scientific said it will keep seeking “resolution from the bankruptcy court and payment of any outstanding amounts owed.”
The firm also stated that,
“Celsius is also using its chapter 11 proceeding to withhold payment of certain charges billed to Celsius under the Agreement.” The firm added that,
“An adverse or untimely ruling by the bankruptcy court that provides Celsius the benefits of the Company’s hosting services without Celsius fully paying the costs of such services would have a material effect on the Company’s business, financial condition, results of operations and cash flows.”
During pre-market trading, Core Scientific shares were up over 1% at $1.29.
Core Scientific vs. Celsius Mining
According to the letter sent to the U.S. Bankruptcy Court for the Southern District of New York, Core Scientific has requested the court to “discuss an appropriate schedule for an evidentiary hearing.” The hearing is currently set for October 20, among other deadlines.
Core Scientific plans to file a motion for affirmative relief against Celsius Mining, looking for one or more of the following:
“[R]elief from the automatic stay to allow it to terminate the Agreement, (…) compelling the Debtors to assume or reject the Agreement in short order; and (…) compelling immediate payment of Core Scientific’s administrative expense claims arising from its performance under the Agreement.”
The firm added that,
“The false allegations the Debtors make in the Contempt Motion are harmful to Core Scientific, and the breach of contract allegations premised on the incorrect notion that Core Scientific must subsidize the Debtors’ money-losing mining business to the tune of millions of dollars a month, immediately threatens the viability of Core Scientific’s business.”
Celsius Mining argued in its letter saying,
“that Core Scientific’s request for a status conference is moot pending the parties’ efforts to resolve interim scheduling dates among themselves.”
