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Bankrupt crypto mining giant Core Scientific has agreed to a $14.75 million settlement to end class action claims from an investor accusing the company’s SPAC partner of misleading shareholders ahead of their blockbuster $4.3 billion merger.

The proposed resolution, filed Wednesday in Delaware Chancery Court, marks a crucial step in resolving allegations that the Power & Digital Infrastructure Acquisition Corp. (PDI) overstated the value of its deal with Core Scientific — one of the largest crypto mining mergers in history.

Investor Pushes Court to Approve Settlement

Plaintiff Brad Ihle, a Power & Digital investor, urged the court to approve what he called a “fair, reasonable, and adequate” deal, claiming it delivers “substantial benefits” to shareholders.

The settlement stems from a double-blind mediation process reached in August. Ihle agreed to the terms after weighing the limited insurance funds available and the risk that prolonged litigation would further erode those resources.

The proposed settlement, still pending court approval, would resolve breach of fiduciary duty claims tied to the SPAC’s management of the Core Scientific merger.

Alleged Misstatements and a Rapid Downfall

Ihle first sued in July 2023, alleging that Power & Digital executives misled investors by portraying the $4.3 billion Core deal as a “significant discount” compared to other public mining companies. That claim, he argued, was intended to dissuade shareholders from redeeming their SPAC shares prior to the merger closing.

Although Ihle later dropped some defendants, allegations persisted against Core Scientific and Theodore J. Brombach, PDI’s founder and chairman.

The complaint traced the company’s downfall to 2021, when Core Scientific filed for Chapter 11 bankruptcy just six months after going public — weighed down by $989 million in debt.

Crypto Crash and Soaring Costs Take Their Toll

Once valued at over $4 billion, Core Scientific blamed its collapse on Bitcoin’s plummeting price, ballooning energy expenses, and tightening liquidity. The company’s data centers were hit by surging electricity costs, slicing deep into profit margins.

Before the merger, PDI shares had traded above $14, but by October 2022, the price had cratered below $1, never recovering before the bankruptcy filing.

Attorneys and Court Oversight

Ihle and the proposed class are represented by Justin O. Reliford, Ora L. Lupear, and Kassandra A. Nelson of Scott+Scott Attorneys at Law LLP; D. Seamus Kaskela and Adrienne Bell of Kaskela Law LLC; and Joseph L. Christensen of Christensen Law LLC.

The defense team includes John P. DiTomo and Rachel R. Tunney of Morris Nichols Arsht & Tunnell LLP, alongside Stefan Atkinson, Mary T. Reale, Ashley P. Grolig, and Andrew Farrington of Kirkland & Ellis LLP.