Trump initiates legal battle against truth social co-founders over breach of agreement
Former President Donald Trump has launched a legal offensive against two co-founders of Trump Media & Technology Group Corp., alleging mishandling of the company’s formation and disputing their rightful stake.
In a lawsuit filed in a Florida state court on March 24, Trump contends that Andy Litinsky and Wes Moss breached agreements concerning the setup of the company and should relinquish their 8.6% stake, valued at a staggering $606 million.
This legal saga unfolds against the backdrop of dramatic fluctuations in Trump Media’s stock, which debuted on the market last week following a merger with a special purpose acquisition company (SPAC).
Following the company’s disclosure of a $58 million loss and meager revenue for 2023, coupled with a declaration of reliance on funds from the SPAC deal for operational sustainability, the stock nosedived by 21% on Monday.
However, there was a surprising turnaround as the stock saw a 6.1% increase, climbing to $51.63 on Tuesday afternoon, as reported by Bloomberg.
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Trump alleges that Litinsky and Moss neglected their duties to establish the corporate governance structure of Trump Media, launch the Truth Social platform, and secure a suitable merger partner, hindering the company’s advancement.
Furthermore, he accuses them of exacerbating the situation by attempting to disrupt the blank check deal.In contrast, Litinsky and Moss assert that Trump aimed to dilute their stake by seeking additional shares.
Trump’s personal wealth is intricately tied to his stake in Trump Media, potentially shielding him from substantial legal liabilities. However, a six-month lockup period prohibits him from selling his shares immediately.
With Trump holding a commanding 57% ownership stake, valued at $4.02 billion according to filings with the US Securities and Exchange Commission, the outcome of this legal showdown could profoundly affect his financial standing.
However, the Delaware judge overseeing Litinsky and Moss’s lawsuit expressed surprise at Trump’s decision to file in Florida rather than pursuing counterclaims in his courtroom. The judge has signaled a willingness to explore potential sanctions against Trump, highlighting the intricacies of the legal proceedings surrounding Trump Media’s tumultuous journey.
The lawsuit, titled Trump Media & Technology Group v. United Atlantic Ventures, is currently under deliberation in the Florida Circuit Court, 12th Judicial Circuit.
