The co-founders of the media firm that former President Donald Trump recently took public are being sued by the company, which claims they failed "spectacularly" to launch the business and are now attempting to "thwart the deal."
The action, which was filed in a civil court in Sarasota County, Florida, attempts to prevent Wesley Moss and Andrew Litinsky, the co-founders of Trump Media & Technology Group, from having any ownership or influence over the company's board of directors.
Trump Media Sues Co-Founders
Wesley Moss and Andrew Litinsky, former competitors on 'The Apprentice,' are staking out an 8.6% stake in Trump Media's overall shares, arguing that their entitlement is protected by a 2021 contract Donald Trump signed with United Atlantic Ventures, LLC. The estimated value of their alleged stake would be $601 million based on Tuesday's closing price of DJT.
In February, Moss and Litinsky initiated legal action against Trump Media in Delaware Chancery Court, contesting their stake in the company. This lawsuit was filed around the same period when shareholders of Digital World Acquisition Corp., a shell company, greenlit a merger with Trump Media, the entity responsible for the emerging social media app Truth Social.
Through United Atlantic Ventures, Litinsky and Moss were scheduled to receive 8.6 million shares in the new merged business, according to the court case. This interest, which is estimated to be worth $444 million, shows what the complaint considers to be an exceptional opportunity for the two parties, who it says are taking use of President Trump's power.
The lawsuit contends that Truth Social's existence hinged on President Trump's involvement, emphasizing his pivotal role in its creation. Litinsky and Moss, acting through United Atlantic Ventures, had previously sued Trump, alleging his intention to dilute their ownership in the new entit, according to CNN News.
Trump Media's Debut Amidst Truth Social's Challenges
Trump Media's public debut last week saw Donald Trump holding 78.8 million shares valued at about $4.1 billion, an increase of $228 million from the previous closing price.
In addition to Moss and Litinsky, the lawsuit also implicates United Atlantic Ventures (UAV) and Patrick Orlando, the former CEO of Digital World Acquisition Corp. The suit accuses Moss and Litinsky of undermining the company during negotiations with Orlando, which led to an SEC investigation in 2021 and delayed the merger for over 18 months.
Previously, Moss and Litinsky sued Trump Media in Delaware, alleging the company's illegal efforts to diminish their stake.
Truth Social is presently in a state of an uncertain stage as it begins its journey as a public corporation, and these legal disputes are occurring during this time.
At the same time that Truth Social's share price dropped from over $80 to $51.60 at the end of Tuesday's trading session, the Securities and Exchange Commission (SEC) issued papers on Monday that showed the company had incurred a net loss of $58 million in 2023, My Panhandle reported.
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