Donald Trump’s recently public media company is suing its co-founders, accusing them of “grossly” failing to get the company off the ground and then trying to “block the deal.”
Suit filed in Sarasota County, Florida, civil court seeks injunction Trump Media Technology Group Co-founders Wesley Moss and Andrew Litinsky serve on the company’s board of directors or own any shares in the company.
Moss and Litinsky claim that the 2021 agreement between Trump and United Atlantic Ventures, LLC, the company they founded, guarantees that they will hold 8.6% of the total capital stock of Trump Media without dilution through the issuance of new shares.
Based on DJT’s closing price on Tuesday, the stock is worth about $601 million.
In February, Moss and Litinsky sued Trump Media in Delaware Chancery Court, accusing them of holding shares in the company.
The lawsuit was filed in late March, around the same time that shell company shareholders Digital World Acquisition Company Voted to approve a merger with Trump Media Inc., the private company behind emerging social media app Truth Social.
Following the special purpose merger, shares of the newly public Trump Media Company began trading under the ticker DJT and soared 50% in their Nasdaq debut last week.
But shares fell sharply on Monday after the company disclosed a net loss of $58.2 million in 2023.
Trump Media filed a lawsuit in Florida seeking damages for what it claimed was a “breach of fiduciary duty” by Moss and Litinsky.
In addition to Moss and Litinsky, the lawsuit names DWAC founder Patrick Orlando as a co-defendant, accusing him of participating in the violations.
Moss and Litinsky were responsible for establishing Trump Media’s corporate governance structure, preparing to launch Truth Social and finding shell companies to merge with to take the media company public, according to the Florida lawsuit.
Trump Media said Moss and Litinsky, both former contestants on Trump’s former reality show “The Apprentice,” failed “every time.”
The company claimed they made “wasteful decisions” that caused “significant harm” to Trump Media and caused DWAC’s stock price to drop. The lawsuit alleges that they chose to merge with Orlando-based Benessere Capital Acquisition Corp. despite business conflicts with DWAC that ultimately led to an SEC investigation.
Moss and Litinsky then decided to “retaliate” on the eve of the vote to merge Trump Media with DWAC, suing the soon-to-be-public company, according to the lawsuit. report Bloomberg.
Trump’s media called claims of drone shortages “baseless” and said the service agreement Trump signed with drones in 2021 is no longer valid.
The lawsuit alleges that after Trump’s representatives raised concerns about the agreement in July 2021, Eric Trump sent a letter to the drone saying that his father “believed” the agreement was “invalid.” It is said that the drone “tacitly approved” Trump’s decision to cancel the contract.
Lawyers for Trump Media did not immediately respond to CNBC’s request for comment on the lawsuit. Litinsky and Moss could not immediately be reached.
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