Trump files lawsuit against Truth Social Media Company’s co-founders over ownership stake

Trump files lawsuit against Truth Social Media Company’s co-founders over ownership stake

(Bloomberg) — Donald Trump has intensified the battle for shares of his new public company Trump Media & Technology Group Corp. by filing a lawsuit against its co-founders, claiming they had violated an agreement creating the social media company and should not get one. store it at all.

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Andy Litinsky and Wes Moss don’t deserve their 8.6% stake, Trump argued in the complaint filed March 24 in Florida state court. The suit, which has not been previously reported, comes after the two men filed their own lawsuit against the former president in Delaware Chancery Court over their promised stake in the company.

The legal battle is taking place amid wild swings in shares of Trump Media, which began trading last week after merging with a special purpose acquisition company, known as a SPAC. The stock fell 21% Monday after Trump Media disclosed in a securities filing a $58 million loss and a relative net of revenue for 2023, and reiterated a warning that it needed the money of the SPAC deal to continue operating.

The stock was up nearly 6% on Tuesday.

Trump claims that Litinsky and Moss failed to properly establish Trump Media’s corporate governance structure, launch its Truth Social platform and find a suitable merger partner. This failure hurt the company, he says. He says they then “began continually trying to thwart” the blank check agreement in the fight for their respective shares. In their own lawsuit, the two men claim that Trump planned to seek millions more shares, thereby diluting their stake.

Lawyers for Litinsky and Moss did not respond to emails seeking comment on Trump’s suit.

Read more: Trump’s net worth drops by $1 billion as social media company sinks

Trump, the presumptive Republican nominee in November’s presidential election, has seen his net worth soar due to his stake in Trump Media, which he could ultimately use to pay off hundreds of millions of dollars in judgments against him – although it is currently unable to sell these shares for six months due to a blockage. Despite its crisis, Trump Media currently has a market capitalization of $7.13 billion, and the bigger its stake, the more money it could make. If the shares soar, his payout would decrease.

Trump owns 57% of the company, according to filings with the U.S. Securities and Exchange Commission, with his stake now worth $4.06 billion on paper.

Read more: Follow the Trump trials

Delaware Judge Sam Glasscock III declined to expedite the trial of Litinsky and Moss after Trump’s lawyers agreed to avoid diminishing the value of their shares. But at a hearing Monday, the two men told the judge they plan to seek an order barring the Florida trial from continuing while they litigate allegations that Trump planned to target their involvement all along.

The judge said he was “stunned” to learn of Trump’s Florida suit — which he filed instead of filing counterclaims against the two men in Glasscock’s courtroom — and that he would consider possible sanctions against the former president in the Delaware affair.

The Florida case is Trump Media & Technology Group v. United Atlantic Ventures, Florida Circuit Court, 12th Judicial Circuit (Sarasota).

—With help from Bailey Lipschultz.

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