JONESBOROUGH, Tenn. (WJHL) – Washington County’s lawsuit against BrightRidge utility and Bitcoin mining operator Red Dog Technologies will likely go to trial before this fall, the county attorney told county commissioners Monday night.
Commissioners on Nov. 28 overwhelmingly rejected a resolution that would have allowed Red Dog to build a new Bitcoin mine in the Washington County Industrial Park in Limestone that would begin operations in late 2020.
Commissioners sued BrightRidge in November 2021, arguing the mine did not meet zoning requirements and was not permitted. BrightRidge leases property to Red Dog next to the Bailey Bridge Road substation in the New Salem community, and originally BrightRidge had applied for a rezoning to allow for what it said would be a “blockchain data center.”
Red Dog’s parent company, GRIID Infrastructure, was the planned user of the space, and the Bitcoin mine is a type of blockchain data center, but county commissioners were never informed of a user other than the Bitcoin mine or BrightRidge when they applied for the utility’s rezoning. In February 2020.
The lawsuit comes months after residents near the mine complained about its noise in May 2021. The mine continued to operate during the lawsuit.
Wilkinson had a longer conversation with commissioners in closed executive session Monday night. He said in response to a question from Commissioner Richard Tucker that “Washington County’s lawsuit was never dismissed when the settlement was negotiated.”
He said the day after the township voted 13-2 to reject the settlement proposal, his office contacted the Washington County Magistrate’s Court, where the suit was filed, “to let them know that settlement is not an option under these circumstances.”
His office explained some of the scheduling issues defense attorneys have raised in light of the upcoming strike. As of Monday morning, there were no updates on the case, but Wilkinson said that will change soon.
“Just this week we heard back from the court to negotiate different court dates,” Wilkinson said. “That will be the next step.”
Wilkinson said she has already discussed the dates regarding her schedule with Angie Charles, Washington County’s planning director and the lead plaintiff in the case.
“We’re waiting to hear from all the advisers that all sides are available,” Wilkinson said. Plaintiff is ready for trial at a time set by the Washington County court.
Meanwhile, the deadline for GRIID’s public offering through a “special purpose acquisition company” (SPAC) called Adit EdTech has been extended. The SPAC’s shareholders unanimously approved a six-month extension from the previous January deadline.
GRIID reported a net loss of about $37 million for the first nine months of 2022, compared to a net profit of $5.1 million for the same period, according to a report filed by GRIID in early December as part of Adit EdTech’s filing with the Securities and Exchange Commission. . GRIID has an operating loss of $13.7 million for the first nine months of 2022, with the rest of its net loss coming from interest expenses.
In 2021, GRIID made $14.6 million in operating profit as Bitcoin prices were higher.
That report also revealed that GRIID’s entire Bitcoin mining capacity is only 68 megawatts (MW). About 25 MW of this is in the Limestone field.
In addition to lower prices for Bitcoin, GRIID paid more for electricity in 2022.
GRIID has had to borrow additional funds at very high interest rates in recent months. In the first nine months of 2022, the company’s interest expenses amounted to $22.7 million, compared to only $2.6 million in the first nine months of 2021.
The company had to rework its credit agreement with Blockchain Access Limited in mid-2022. Instead of a line of credit with the company, he now has a $57 million term loan.