Brandanes & Trump Media: Share Dispute Complicates Merger Vote
Former Trump Media Cofounders Accuse Company of Share Dilution
By [Your Name], Staff Writer
[Date]
Source: Dimitrios Kambouris/WireImage for Vogue via Getty Images, Justin Sullivan via Getty Images
Summary
- Two cofounders of former President Donald Trump’s media company, Trump Media & Technology Group, have filed a lawsuit accusing the company’s executives, including Trump, of scheming to deprive them of their shares ahead of a possible merger.
- Andy Litinsky and Wes Moss, former contestants on “The Apprentice,” filed the lawsuit through their partnership, United Atlantic Ventures (UAV).
- The lawsuit presents a challenge to the upcoming shareholder vote on a merger between Trump’s company and blank-check company Digital World Acquisition.
Dispute over Shares
According to a lawsuit filed by Andy Litinsky and Wes Moss, former contestants of “The Apprentice,” executives at Trump Media, including former President Donald Trump, allegedly conspired to dilute their stake in the company through “11th hour, pre-merger corporate maneuvering,” as stated by the lawsuit seen by The Washington Post.
Trump Media, the parent company of the Truth Social social media network, is in the process of merging with blank-check company Digital World Acquisition, but ongoing legal disputes, including the one filed by Litinsky and Moss, could hinder the final shareholder vote.
In the initial deal, Litinsky and Moss agreed to give Trump a 90% stake in the media startup, while their partnership, United Atlantic Ventures, would retain 8.6%. However, Litinsky and Moss now claim that Trump and other company leaders devised a plan to increase the number of authorized shares, effectively reducing their stake to less than 1%.
Shareholder’s Potential Loss and Trump’s Gain
In a Digital World Securities and Exchange Commission filing, it was revealed that Trump’s shares would be valued at over $3 billion after the merger, with Litinsky and Moss looking at a stake worth nearly $300 million, given the stock’s price at the time.
Owing to significant legal expenses, estimated to exceed $450 million, the potential windfall from the merger would be a significant financial uplift for Trump.
Alleged Shares Distribution and Refusal
Litinsky and Moss’ lawsuit also claims the Trump Media board intended to issue new shares to “Trump and/or his associates and children,” as revealed by The Washington Post. The report highlights a previous instance in which Trump allegedly sought shares from Litinsky, asking if he would donate some shares to his wife, Melania, which Litinsky refused.
The Departure and Legal Hurdles
Following a dispute with the leadership of Trump Media, Litinsky and Moss left the company, but they retained their shares. Despite this, the two-year merger attempt has faced setbacks due to SEC investigations into possible securities violations.
As the final shareholder vote approaches on March 22, the merger faces additional conflicts due to mounting legal challenges.
