Rhodium Enterprises, a major player in the Bitcoin mining sector, has filed for bankruptcy under Chapter 11 in Texas.
The company, which operates several subsidiaries, revealed debts ranging from $50 million to $100 million, while its assets are valued between $100 million and $500 million.
The bankruptcy petition, filed on August 24, includes six subsidiaries: Rhodium Encore, Jordan HPC, Rhodium JV, Rhodium 2.0, Rhodium 10MW, and Rhodium 30MW.
This filing follows a period of financial strain, marked by a default on $54 million in loans owed since July. Despite efforts to restructure, stakeholder disagreements led to the company’s decision to seek bankruptcy protection.
Under Chapter 11, Rhodium will attempt to reorganize its debts while continuing its operations. This process allows the company to propose a repayment plan and negotiate terms with creditors.
Rhodium’s troubles are part of a broader trend in the Bitcoin mining industry.
Falling cryptocurrency prices and rising energy costs have hit many miners hard. For example, Core Scientific filed for Chapter 11 in December 2022 but emerged from bankruptcy earlier this year.
In addition to these challenges, Bitcoin miners have faced reduced earnings due to the April 2024 halving event, which cut mining rewards and squeezed profit margins.
Rhodium also contends with a lawsuit from Rio Platforms seeking over $26 million in unpaid fees related to mining facilities.
The company has enlisted Quinn Emanuel Urquhart & Sullivan for legal guidance and Province for restructuring advice as it navigates through this financial turbulence.
