SAN FRANCISCO—After a two-day hearing before a US Bankruptcy judge, HashFast and its creditors came to a new agreement late Wednesday that will allow the company to continue to do business in a limited form rather than having a court-appointed trustee liquidate the company as part of an involuntary bankruptcy filing.
If successful, the move could pave the way for the embattled Bitcoin mining chipmaker to file for a Chapter 11 bankruptcy protection. Filing for traditional bankruptcy would allow the company to restructure itself, raise money, pay its creditors, and (ideally) re-emerge as a still-functioning company.
Last week, Bitcoin-mining firm Liquidbits told the federal bankruptcy court in San Francisco that HashFast never fulfilled a $6 million deal it had made with the company. Liquidbits asked the judge to appoint a Chapter 7 bankruptcy trustee. Had that request been granted, the trustee’s primary job would have been to immediately liquidate HashFast’s remaining assets.
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