The Rhodium Enterprises lawsuit most people are asking about is really a cluster of them: a Texas Bitcoin miner that filed for Chapter 11 in August 2024, sued its Rockdale hosting partner Riot Platforms for more than $300 million, settled that fight for $185 million in April 2025, and emerged from bankruptcy under a liquidation plan that paid every creditor in full and gave holders of Simple Agreements for Future Equity a near-complete recovery few expected. A separate fee dispute between the company’s former litigation counsel and its Special Committee is the piece of the case still running in 2026.
The Dispute With Riot Platforms
Rhodium hosted mining equipment at the Rockdale, Texas data center operated by Whinstone US, a subsidiary that Riot Platforms acquired in 2021. After the acquisition, Rhodium alleged that Riot terminated a service contract covering 100 megawatts of power, diverted that power to Riot’s own mining, and withheld tens of millions of dollars in energy credits owed to Rhodium. Rhodium sought more than $300 million in damages for breach of contract and tortious interference.1Bloomberg Law. Bankrupt Rhodium Hits Bitcoin Miner Riot With $300 Million Suit
Whinstone had its own claims and sued Rhodium’s principals directly. The adversary proceeding named co-founder and then-CEO Nathan Nichols, Chase Blackmon, Cameron Blackmon, Nicholas Cerasuolo, and the management holding company Imperium Investment Holdings LLC alongside the Rhodium corporate entities.2U.S. Bankruptcy Court Northern District of Texas. Status Conference Docket, Case No. 24-03065 With litigation running in multiple directions and hosting revenue disputed, Rhodium Encore LLC and related entities filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of Texas on August 24, 2024, under Case No. 24-90448.3GovInfo. Rhodium Encore LLC Bankruptcy Memorandum
The $185 Million Settlement
The bankruptcy court approved a global settlement and asset sale between Rhodium and Riot on April 8, 2025, and the deal closed on April 28, 2025. Whinstone acquired all of Rhodium’s tangible property at Rockdale, including every ASIC miner, and took over Rhodium’s 125 megawatts of power capacity, consolidating the entire Rockdale facility under Riot’s control.4Riot Platforms. Riot Platforms Announces Closing of the Acquisition of Rhodium Assets at the Rockdale Facility
Total consideration came to $185 million:
- $129.9 million in cash at closing
- $6.1 million representing the return of Rhodium’s power security deposit
- $49 million in Riot common stock, delivered as 6,989,800 shares issued at $7.01 per share5PR Newswire. Riot Platforms Announces Closing of the Acquisition of Rhodium Assets at the Rockdale Facility
Both sides agreed to dismiss all pending litigation and appeals and to release any future claims not tied to closing.4Riot Platforms. Riot Platforms Announces Closing of the Acquisition of Rhodium Assets at the Rockdale Facility Rhodium got a three-day vacating period and kept the right to Bitcoin mined at the facility until control transferred to Riot.6SEC. Riot Platforms Purchase and Sale Agreement Riot said the deal ended legacy hosting contracts with roughly five years and nine months remaining that had produced a gross loss of about $15 million in fiscal 2024.
The SAFE Holders Ruling
Rhodium entered bankruptcy owing roughly $87 million on Simple Agreements for Future Equity, a hybrid instrument that gives investors the right to equity on a future triggering event but sits uneasily between debt and stock. The debtors argued the SAFEs were equity interests, not claims under the Bankruptcy Code, and should recover little or nothing in a liquidation.3GovInfo. Rhodium Encore LLC Bankruptcy Memorandum
On August 30, 2025, the bankruptcy court ruled, in what it described as a matter of first impression, that the SAFE holders had enforceable contingent claims rather than mere equity interests. The court found that the “Cash-Out Amount” provisions in the SAFE agreements created contractual payment obligations triggered by a dissolution event, and that confirmation of a liquidating Chapter 11 plan qualified. It placed those claims senior to common equity but junior to general unsecured claims, and rejected the debtors’ argument that Bankruptcy Code Section 510(b) subordinated the SAFE recoveries as securities-related claims.7Pillsbury Law. SAFE Creditors Chapter 11 Claims
The effect was to move SAFE holders from a likely wipeout to a collective recovery of more than $85 million, over 98% of the aggregate value of their claims.8Akin Gump. Akin and GXD Labs Announce Landmark Victory With $85 Million Plus SAFE Claim in Rhodium Enterprises Litigation The plan placed the SAFE claims as Class 6, ahead of common interests and Imperium’s interests in the distribution waterfall.9elevenflo.com. Rhodium Encore Riot Settlement Drives Liquidation Plan The court also authorized an $8.5 million substantial-contribution award to Akin Gump and GXD Labs for their work on behalf of the SAFE group, described as one of the largest such awards ever reported.
Other Claims Resolved in the Bankruptcy
Before the Riot settlement, Rhodium sold its Temple, Texas mining site. Temple Green Data, LLC, described as Rhodium’s landlord at Temple and linked to data center developer Rowan Digital Infrastructure, won the auction with a bid worth $40.6 million in cash: a $35 million payment plus return of a $5.6 million security deposit.10The Energy Mag. Rhodium Temple Bitcoin Mine CEO The court approved the sale on November 26, 2024, and it closed on December 18, 2024.11Law360. Bitcoin Miner Rhodium to Get OK for $55M Ch. 11 Sale Power agreements and infrastructure transferred; the mining hardware did not. Riot Platforms was the backup bidder.
A patent claim also failed. Midas Green Technologies had sued Rhodium in the Western District of Texas, alleging that Rhodium’s immersion cooling systems infringed U.S. Patent No. 10,405,457, and sought $12.3 million. At a pretrial conference in April 2024 the district court signaled it would grant Rhodium summary judgment of noninfringement, though no written order was entered before the case moved into bankruptcy.12GovInfo. Rhodium Encore LLC Bankruptcy Court Opinion on Midas Green Claims13Law360. Midas Loses Patent Infringement Claim in Rhodium Ch. 11
The Fee and Sanctions Fight
Lehotsky Keller Cohn LLP served as Rhodium’s special litigation counsel and played a central role in securing the Whinstone settlement. When the firm sought a court-approved success fee, the Special Committee of Rhodium’s board refused to negotiate, saying the fee could not be calculated until a tax allocation between the debtors and Whinstone was finalized. Lehotsky Keller Cohn called that reasoning a “fiction.”14Verita Global. Lehotsky Keller Cohn Sanctions Motion
The firm alleged that the Special Committee and its counsel, Barnes & Thornburg LLP, escalated the fight by publicly accusing Lehotsky Keller Cohn of “professional and ethical misconduct,” breach of fiduciary duty, malpractice, and fraud, and refused to file those accusations under seal. Two days before the scheduled fee trial, on November 1, 2025, the Special Committee withdrew the allegations without explanation. The bankruptcy court then awarded Lehotsky Keller Cohn its success fee in full.14Verita Global. Lehotsky Keller Cohn Sanctions Motion
On February 13, 2026, Lehotsky Keller Cohn filed a separate adversary proceeding and sanctions motion against the Special Committee, individual board members David Eaton and Spencer Wells, the Ad Hoc Group of SAFE Parties, and Barnes & Thornburg, seeking more than $1.5 million in fees and expenses the firm said it spent defending what it called a “malicious campaign.”15PACER Monitor. Lehotsky Keller Cohn LLP v. Special Committee of the Board of Directors of Rhodium Enterprises, Inc.14Verita Global. Lehotsky Keller Cohn Sanctions Motion Barnes & Thornburg and the former directors responded in March 2026 that the firm had “improperly turned a good faith dispute over Chapter 11 fees — which the firm won — into a bid for sanctions.”16Bloomberg Law. Barnes Thornburg Fights Sanctions Bid in Rhodium Bankruptcy As of June 2026, the court had denied a motion to dismiss the adversary proceeding and ordered counsel to confer on a scheduling order for an evidentiary hearing.
Where Things Stand
The Chapter 11 liquidating plan was filed on May 23, 2025, and proposed full recovery — 100% of claims plus post-petition interest — for all creditors. Secured noteholders held roughly $64 million in claims and general unsecured creditors about $6.7 million. The plan set aside an equity reserve for shareholders, with the ultimate split depending on whether the parties agreed or the matter went to interpleader.17chapter11cases.com. Bitcoin Miner Rhodium Proposes Full Recovery for Creditors in $185 Million Chapter 11 Plan A Rhodium Litigation Trust was established to pursue additional causes of action for creditors and interest holders.18chapter11cases.com. Bitcoin Miner Rhodium Proposes Full Recovery for Creditors in $185 Million Chapter 11 Plan
The court confirmed the plan on December 19, 2025, and it took effect on January 14, 2026. GXD Labs, a subsidiary of Atlas Grove Partners that specializes in digital asset recovery and restructuring, was appointed plan administrator with sole authority over the wind-down, remaining assets, and distributions.9elevenflo.com. Rhodium Encore Riot Settlement Drives Liquidation Plan Nathan Nichols resigned from the company effective after the new year, around the same time that creditors filed a separate lawsuit accusing him and other co-founders of fraud.10The Energy Mag. Rhodium Temple Bitcoin Mine CEO The Lehotsky Keller Cohn sanctions dispute is the most active remaining piece of the case.