NFN8 Group filed chapter 11 on February 2, 2026 in the Western District of Texas with a filing package built around an early asset sale rather than a long runway toward plan confirmation. The debtors opened the cases with requests for debtor-in-possession financing, cash-management relief, a claims agent, a broker, and a quick section 363 process after saying that post-halving mining economics, investor litigation, and a late-2025 facility fire had left too little liquidity to keep operating outside court. The three cases were jointly administered under NFN8 Group's lead docket in Austin.
The operating model was not limited to self-mining. The debtors say the business also relied on a sale-leaseback structure that covered several thousand miners and more than 250 counterparties, while NFN8 Capital still owned over 5,000 unencumbered mining machines. By March 6, 2026, the court had entered the interim DIP order and approved the broker retention, but the amended sale procedures were still waiting for a March 9 hearing under the amended sale motion.
U.S. Bankruptcy Court, Western District of Texas (Austin Division)
Case Number
26-10193 (lead case)
Petition Date
February 2, 2026
Judge
Hon. Shad M. Robinson
Business
Industrial-scale Bitcoin mining, hosting, and equipment sale-leaseback operations
Key Facilities
Crystal City, Texas; Shelby, Iowa; Walnut, Iowa
DIP Facility
Interim authority for a $750,000 initial draw under a proposed $2.75 million commitment from Twelve Bridge Capital
Sale Track
Section 363 sale of substantially all assets; amended bid-procedures hearing set for March 9, 2026
Case Snapshot
Halving Margins, Investor Arbitration, and the Crystal City Fire
The First Day Declaration describes a business that had already absorbed several operating and financing shocks before the chapter 11 petitions were filed. NFN8 said it ran an industrial-scale Bitcoin mining platform through NFN8 Group, NFN8 Capital, and NFN8 Holdings, with revenue tied to block rewards, transaction fees, hosting arrangements, and equipment programs. The filing record says that structure worked for years when mining economics were stronger, but the debtors lost room to absorb volatility once mining revenues stopped covering lease obligations, operating expenses, and capital needs.
The first inflection point in the filing narrative is the April 2024 Bitcoin halving. Public coverage framed the NFN8 filing as part of a broader post-halving stress test for smaller and mid-sized miners, and the debtors' own filing story lines up with that framing. NFN8 says revenue per unit of computational power recovered more slowly than in prior cycles, leaving a thinner margin between mining output and fixed obligations. A second, older disruption also remained in the background: public company materials tied part of NFN8's earlier expansion to hosting arrangements at Core Scientific's Dalton, Georgia site for ANTMINER S19 XP units, and the debtors say Core Scientific's later bankruptcy contributed to hosting terminations that forced redeployment of miners in 2023.
The filing record then pivots from operating stress to legal stress. NFN8 says the sale-leaseback program began drawing investor claims after payment suspensions and defaults, leading to litigation in October 2024 and later arbitration. External reporting on the state-court dispute said a judge compelled arbitration and denied preliminary injunctive relief, and the DIP papers add that the arbitration was already consuming substantial professional fees while exposing the company to collection risk.
The final blow, in the debtors' telling, was the fire at Crystal City. The first-day papers say a late-2025 fire at that facility cut mining capacity and revenue by as much as 50%. External coverage repeated the same point, describing a fire that cut capacity in half and a filing driven by both lease pressure and an operating outage. By the petition date, the debtors were telling the court they needed financing to preserve asset value long enough to market the fleet and related site assets in an orderly process rather than falling into a disorderly liquidation.
Sale-Leaseback Model and Texas-Iowa Footprint
NFN8's public materials and its bankruptcy filings describe a company that tried to build more than a straightforward self-mining operation. On its public site, NFN8 says it started in 2017 and built a mining platform with a software layer that determines what to mine and when to sell. The company also identified Josh Moore as CEO, while the bankruptcy filings place NFN8 Group above NFN8 Capital and NFN8 Holdings in the debtor structure. NFN8 Capital held equipment and sale-leaseback relationships, while NFN8 Holdings leased and operated miners within the integrated platform described in the first-day papers.
The physical footprint was concentrated in Texas and Iowa. The bankruptcy record identifies operating sites in Crystal City, Texas, Pleasant Shelby, Iowa, and Prairie Rose, Iowa. Public-facing materials describe a much larger expansion story around the same footprint. In February 2025, NFN8 said it had expanded a Texas property spanning 450,000 square feet on 22 acres, with 70,000 square feet dedicated to mining operations and repairs and capacity increased from 6 megawatts to 10 megawatts. A separate company article described a Texas mining facility with a 10-megawatt electrical setup and a push-pull airflow system designed to control heat.
The Iowa sites fit the same growth story. NFN8 said one Iowa facility was already operating around 10 megawatts, with plans for another 8.5 megawatts of capacity in the same February 2025 release. The company presented itself as a scaling operator with site infrastructure through early 2025, then entered chapter 11 less than a year later while seeking to sell substantially all assets across multiple sites, a large fleet, and the contractual obligations layered on top of the mining business.
The most distinctive part of the business model was the equipment program. NFN8 publicly promoted an equipment purchase and buyback program in which customers purchased mining equipment, NFN8 operated that equipment in company facilities, customers received fixed monthly payments for two to four years, and the equipment could later be repurchased. The first-day declaration describes the same structure from the debtor side as a sale-leaseback program: NFN8 Capital sold mining supercomputers to counterparties and simultaneously leased them back on fixed terms, while NFN8 Holdings operated the machines as part of the larger mining platform. In January 2025, NFN8 also said it had finished 2024 debt-free apart from those sale-leaseback obligations after repaying more than $11 million to NYDIG. Those sale-leaseback obligations remained after the NYDIG repayment.
NFN8 was also still refining its operating strategy before the filing. In May 2025, the company announced a shift to immersion cooling, and in February 2025 it announced an energy arrangement with TESS Energy Solutions involving a thermal battery system. The debtors announced these expansion and cost-reduction initiatives within roughly a year of the filing.
Twelve Bridge DIP and Sale-Linked Draws
The proposed financing package came from Twelve Bridge Capital and was designed to bridge the debtors into a sale. The DIP motion proposed a senior secured superpriority priming facility of up to $2.75 million, structured as a multi-draw term loan with NFN8 Group as borrower and the two affiliates as guarantors. The motion set interest at 13.0% per year, payable in kind on a monthly basis, with a 3.0% default-rate step-up. It also described a broad collateral package over cash, equipment, insurance proceeds, intellectual property, bank accounts, and other property, subject to a carve-out and the exclusion of avoidance actions themselves.
What the court actually approved on an interim basis was smaller and more conditional. The interim order authorized only a $750,000 initial draw, with a stated net funded amount of $437,500 after approved fees. The balance of the proposed $2.75 million commitment was left for a later final order. The order also imposed practical constraints on future borrowing: absent a satisfactory insurance-coverage determination, the lender had no obligation to fund beyond the initial draw, and even if that determination was satisfied the aggregate advances could not exceed $1,352,650 unless a qualified bid acceptable to the lender had been submitted.
That sale linkage appears again in the lender protections. The interim order preserved a carve-out for statutory fees and professional fees, including a post-default cap of $150,000 for debtor professionals after a carve-out trigger notice. It also provided that Twelve Bridge would have credit-bid rights only after entry of a final order. Early headlines focused on a $2.75 million DIP, while the interim relief approved as of March 6 was smaller. External reports described a DIP financing package tied to asset liquidation backed by Twelve Bridge; the filed interim order authorized the $750,000 initial draw.
The cash system also mattered because NFN8 mined Bitcoin, sold it, and converted it into operating cash through a relatively compact account structure. The cash management motion says the debtors used five Burling Bank accounts plus a Kraken wallet. Bitcoin mined by the business was sold on Kraken, with cash moving into the NFN8 Holdings account and then into the NFN8 Capital operating account to fund payroll, bills, and other ordinary-course expenses. The motion also says a non-debtor affiliate, NFN8 Inc., reimbursed the debtors for payroll, rent, utilities, and electricity under service arrangements, and that one account was used when physical checks were required.
The court approved that framework on an interim basis early in the case, and the utility order separately approved a $7,500 adequate-assurance deposit for utility providers. The DIP and cash-management relief was sized to preserve the fleet, sites, and counterparty arrangements during the marketing period rather than to fund an open-ended operating runway.
Sale Timeline and Tax-Lien Objections
The sale record moved quickly. The original sale motion filed on February 12 proposed a standard but aggressive menu of options: a negotiated sale with a designated purchaser, a stalking-horse bid followed by an auction, or an auction without a stalking horse. It set a March 9 bid-procedures hearing, a February 27 stalking-horse deadline, a March 4 stalking-horse designation deadline, an April 13 bid deadline, an April 21 auction if needed, and a sale hearing on or before April 28. It also proposed bid protections capped at 3% for a break-up fee and 1.5% for expense reimbursement, plus a 10% deposit requirement and enough cash value to pay DIP obligations in full unless the debtors and lender agreed otherwise for a partial-asset bid.
The debtors then accelerated the calendar. Under the amended sale motion, the general bid deadline moved up to April 3, 2026, the auction moved to April 8, 2026, and the debtors asked that the sale hearing be set on or before April 15, 2026. The amended motion also set a $50,000 minimum overbid. Just as important, it made clear that the March 9 hearing was for the amended bid-procedures motion itself, not the ultimate sale approval. The motion preserved the structure from the earlier filing: assumption and assignment procedures for executory contracts and leases, a continued ability to use a stalking horse if one emerged, and credit-bid rights for the DIP lender.
The assets being marketed were not limited to individual machines. The sale motions describe substantially all assets as including rights and arrangements to procure, control, and use electrical power at operating facilities, site-control interests, operational infrastructure, revenue-generating relationships, and associated equipment and personal property. The motions exclude avoidance actions from the asset package, preserving the estate's later litigation rights.
The most concrete litigation around that process in late February came from local tax creditors. Zavala County filed the DIP objection on February 27, arguing that its Texas ad valorem tax liens should neither be primed nor subordinated and asking that $521,786.06 of Texas sale proceeds be segregated as adequate protection before distributions to other creditors. Williamson County then filed a joinder seeking equivalent treatment for its own $606.29 estimated 2026 claim tied to the Austin address.
By early March, though, that dispute had narrowed rather than expanded. Zavala County filed a withdrawal notice on March 4 saying the relevant issues had been resolved through agreed provisions to be included in the final DIP order, and Williamson County filed its withdrawal of joinder on March 5. The final DIP order had not been entered as of March 6, so the agreed protective language was not yet on the docket.
Advisors, Governance, and Case Administration
The filing record shows the debtors trying to centralize control quickly. The first-day declaration says principal Josh Moore was removed from restructuring and sale decision-making because of his affiliation with a potential purchaser, with authority instead vested in independent director Eric J. Taube and CRO Erik White.
The debtors also built out the administrative layer early. The court approved Epiq as claims agent effective as of the petition date, authorizing it to handle noticing, claims processing, register maintenance, and any later ballot tabulation. The order also approved ordinary-course payment of undisputed invoices and a $25,000 retainer.
The same is true on the sale side. The court approved Synteq as broker on February 19. The underlying application describes Synteq as the exclusive sales and disposition agent for the debtors' mining equipment, power infrastructure, and related site assets, with compensation structured as a 7.5% commission on gross sale proceeds plus expense reimbursement. The retention order approved compensation under section 328(a), while leaving expense review under section 330.
Some of the most important professionals, however, were still only at the application stage as of March 6. The Harney Partners application filed on March 4 sought approval of HMP Advisory Holdings, LLC d/b/a Harney Partners as financial advisor nunc pro tunc to February 2 and Erik White as CRO, with White billing at $675 per hour and Harney having already received a $50,000 advance. The KRCL application filed the same day sought approval of Kane Russell Coleman Logan PC as counsel, listing 2026 restructuring rates of $700 for Trip Nix, $645 for Casey Roy, $575 for JaKayla DaBera, $495 for Abby Rogers, and $355 to $375 for paralegals, with a retainer that had largely been used prepetition.
By March 6, Epiq and Synteq were approved, while the Harney Partners and KRCL applications remained pending without final retention orders.
Industry Context for a Texas Bitcoin Miner
NFN8 filed into a part of the market where revenue volatility, power economics, and financing structures are tightly connected. A Fidelity Digital Assets analysis on the economics of the Bitcoin halving described why miners face immediate margin pressure when rewards are cut in half and hashprice does not recover quickly enough. NFN8 describes the same dynamic in court: mining margins compressed while fixed obligations under its operating and lease structure remained in place.
Texas also remains a logical but demanding jurisdiction for that type of business. The U.S. Energy Information Administration's Texas electricity profile shows the scale of the state's generation base and summer capacity, while ERCOT has publicly highlighted a voluntary curtailment program for large flexible customers that specifically includes bitcoin mining facilities. NFN8's prepetition messaging emphasized Texas site expansion, thermal-battery arrangements, and cooling upgrades.
A Cambridge study on mining energy use reported higher use of sustainable power sources across mining activity, consistent with NFN8's prepetition releases on immersion cooling and energy storage. The chapter 11 filing turns on liquidity, contract obligations, and the sale process.
Frequently Asked Questions
When did NFN8 Group file for chapter 11?
NFN8 Group, NFN8 Capital, and NFN8 Holdings filed on February 2, 2026 in the Western District of Texas.
What is NFN8 trying to do in chapter 11?
The debtors are trying to sell substantially all assets through a court-supervised section 363 process rather than continue in a long operating restructuring.
Why did the company say it filed?
The filings point to margin compression after the 2024 halving, hosting disruption tied to Core Scientific, litigation and arbitration with sale-leaseback counterparties, and the Crystal City fire that cut capacity. Early case coverage also described a fire-and-lease-pressure filing and an asset-sale path backed by DIP financing.
What DIP financing has actually been approved so far?
The court has approved only the interim facility: an initial draw of up to $750,000 under the larger proposed commitment.
What happens at the March 9 hearing?
The March 9 hearing is the hearing on the amended bid-procedures motion, not the final sale hearing. The debtors are asking the court to approve the timetable and procedures for the asset sale process.
What assets are being marketed for sale?
The sale motions describe substantially all assets as including power rights and arrangements, site-control interests, operational infrastructure, customer and revenue relationships, mining equipment, and related personal property.
Did any creditors object to the DIP or sale process?
Yes. Zavala County and Williamson County objected to the treatment of their Texas ad valorem tax liens, then withdrew those objections after saying agreed language would be included in the final DIP order.
Who is the claims agent in the case?
The court approved Epiq as claims agent effective as of the petition date.
February 2, 2026 /documents/c47fd600-0427-4ded-bb18-f5afed6fa3f5/
post-halving stress test https://www.ainvest.com/news/bitcoin-mining-fragile-economics-nfn8-bankruptcy-stress-test-2602/
ANTMINER S19 XP units https://www.businesswire.com/news/home/20220804005301/en/NFN8-GROUP-Welcomes-the-Future-of-Digital-Currency-Mining-to-the-U.S.
compelled arbitration and denied preliminary injunctive relief https://blocktribune.com/federal-judge-grants-nfn8s-motion-to-compel-arbitration-denies-preliminary-injunction-request/
fire that cut capacity in half https://www.theenergymag.com/news/2026-02-09/bitcoin-nfn8-bankruptcy
started in 2017 https://nfn8.com/about
Josh Moore as CEO https://nfn8.com/team/
Texas property spanning 450,000 square feet on 22 acres https://www.businesswire.com/news/home/20250213089013/en/NFN8-Group-Enhances-Expansion-with-Upgrades-to-Bitcoin-Mining-Operations
Texas mining facility with a 10-megawatt electrical setup https://nfn8.com/articles/nfn8-group-launches-high-tech-bitcoin-mining-facility-in-texas/
equipment purchase and buyback program https://www.globenewswire.com/news-release/2024/12/11/2995165/0/en/NFN8-Group-Discusses-Its-Unique-Digital-Asset-Mining-Equipment-Purchase-Buyback-Program.html
TESS Energy Solutions https://www.globenewswire.com/news-release/2025/02/28/3034820/0/en/NFN8-Group-Secures-Agreement-with-TESS-Energy-Solutions-to-Cut-Costs-and-Enhance-Sustainability.html
DIP financing package tied to asset liquidation https://www.cryptopolitan.com/nfn8-enters-bankruptcy-process/
Fidelity Digital Assets analysis https://www.fidelitydigitalassets.com/research-and-insights/economics-bitcoin-halving-miners-perspective
voluntary curtailment program for large flexible customers https://www.ercot.com/news/release/2022-12-06-ercot-creates-voluntary
Cambridge study on mining energy use https://www.jbs.cam.ac.uk/2025/cambridge-study-sustainable-energy-rising-in-bitcoin-mining/
a fire-and-lease-pressure filing https://www.techflowpost.com/en-US/newsletter/113858
an asset-sale path backed by DIP financing https://finance.yahoo.com/news/nfn8-group-files-chapter-11-215006759.html
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. See the disclaimer.