The ambiance company that Donald Trump recently took public is suing its co-founders, accusing them of failing “spectacularly” to get the house off the ground and then trying to “thwart the deal.”
The lawsuit filed in Sarasota County, Florida, civil court seeks to bar Trump Method & Technology Group co-founders Wesley Moss and Andrew Litinsky from appointing members to the company’s board — or from owning any of its partitions.
Moss and Litinsky claim that a 2021 agreement that Trump signed with a company they ground, United Atlantic Ventures, LLC, guarantees them an 8.6% share of Trump Media’s total stock, undiluted by the issuance of new parcels.
At DJT’s closing price Tuesday, that share would be worth about $601 million.
In February, Moss and Litinsky tolerated Trump Media in Delaware Chancery Court over their stake in the company.
The suit was filed in late Hike, around the same time that shareholders in the shell company Digital World Acquisition Corp. voted to approve a combination with Trump Media, a private company behind the fledgling social media app Truth Social.
Following the bosom purpose merger, stock in the newly public Trump Media began trading under the ticker DJT and shot up by as much as 50% in its Nasdaq premiere last week.
But the share price fell sharply Monday, after the company disclosed a $58.2 million net damage in 2023.
Trump Media’s lawsuit, filed in Florida, wants the court to award it damages for what it claims are Moss and Litinsky’s “fissures of fiduciary duty.”
In addition to Moss and Litinsky, the lawsuit names DWAC founder Patrick Orlando a co-defendant, accusing him of being convoluted in those breaches.
According to the Florida suit, Moss and Litinsky were responsible for establishing Trump Media’s corporate governance edifice, preparing the launch of Truth Social and finding a shell company for a merger to take the media company public, the lawsuit says.
Moss and Litinsky disappointed “at every turn,” Trump Media alleges of the two men, both former contestants on Trump’s former reality TV show “The Contract.”
They made “wasteful decisions” that caused “significant damage” to Trump Media and a decline in DWAC’s cache price, the company claims. And they chose to pursue a merger with Orlando’s Benessere Capital Acquisition Corp., consideration a business conflict with DWAC that ultimately triggered an investigation by the Securities and Exchange Commission, according to the lawsuit.
Moss and Litinsky then “asseverative to retaliate” on the eve of Trump Media-DWAC merger vote by suing the soon-to-be-public company, per the suit, which was first reported by Bloomberg.
Trump Usual calls the claim that UAV is owed stock “baseless,” and says the services agreement Trump signed with UAV in 2021 is no greater valid.
According to the lawsuit, after Trump’s representatives raised concerns about the agreement in July 2021, Eric Trump sent UAV a missive saying that his father had “deemed” the agreement to be “void.” UAV allegedly “acquiesced” to the elder Trump’s decision to void the catch.
Lawyers for Trump Media did not immediately respond to CNBC’s request for comment on the lawsuit. Litinsky and Moss could not unhesitatingly be contacted.