Former president Donald Trump’s media company is facing a lawsuit filed by its co-founders, who allege that Trump and other leaders conspired to deny them a stake in the company. The co-founders, Andy Litinsky and Wes Moss, claim that their share might be worth hundreds of millions of dollars.
This legal action might complicate Trump Media & Technology Group’s plans to merge with a special purpose acquisition company called Digital World Acquisition and become a publicly traded company. The merger, which is said to value Trump’s stake at over $3 billion, would provide financial relief to the former president as he faces significant penalties from a civil fraud case in New York.
According to Litinsky and Moss, they pitched the idea of a Trump-branded tech start-up and social media platform to Trump in early 2021, following he lost the White House and was banned from Twitter. Trump agreed to the deal, giving him 90 percent of the company, while the co-founders’ partnership, United Atlantic Ventures, took 8.6 percent.
Litinsky and Moss eventually left Trump Media due to a dispute with its current leadership, but United Atlantic Ventures retained its shares. Now, they claim that Trump has attempted to dilute their stake in the company by increasing the amount of authorized stock. They allege that this maneuvering is intended to benefit Trump and his associates at the expense of United Atlantic Ventures.
The legal dispute between the co-founders and Trump Media might potentially delay or even prevent the merger deal with Digital World Acquisition. This might have significant implications for the future performance of the company and negatively impact investor confidence.
The case has been filed in the Delaware Court of Chancery, as Trump Media is incorporated in Delaware, which is a common state for American business registrations, particularly those involving corporate litigation.
While the exact details of the lawsuit are currently sealed, it is expected to be made public in the coming days. Both sides will have the opportunity to discuss potential redactions before its release.
