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.
