Former contestants of “The Apprentice” and cofounders of Trump Media, Andy Litinsky and Wes Moss, have filed a lawsuit accusing company executives of attempting to diminish their ownership stake ahead of a potential merger. The lawsuit, filed through their partnership United Atlantic Ventures (UAV), alleges that corporate maneuvers were orchestrated to deprive Litinsky and Moss of shares worth hundreds of millions of dollars.
Allegations and Response
According to The Washington Post, the lawsuit claims that Trump Media executives, including Donald Trump himself, engaged in last-minute actions to dilute Litinsky and Moss’s stake in the company. Trump Media’s press office has not provided a response to Business Insider’s request for comment on the matter.
Implications for Merger
The lawsuit adds another layer of complexity to the impending shareholder vote on the proposed merger between Trump’s media company and Digital World Acquisition, a blank-check company. Litinsky and Moss assert that the proposed increase in authorized stock from 120 million shares to 1 billion shares would significantly reduce their ownership stake.
Background and Financial Impact
Litinsky and Moss initially approached Trump in 2021 with a proposal for a Trump-branded media venture, resulting in a deal that granted Trump a 90% stake and UAV an 8.6% stake. The potential value of Trump’s shares post-merger is estimated to exceed $3 billion, while UAV’s stake could be worth nearly $300 million. This financial windfall would come at a crucial time for Trump, who faces substantial legal expenses exceeding $450 million.
Allegations of Favoritism
The lawsuit also alleges that the Trump Media board intended to allocate new shares to Trump and his associates, potentially further diluting Litinsky and Moss’s ownership. Previous reports indicated that Trump had requested Litinsky to surrender some of his shares to Melania Trump, a request that Litinsky reportedly declined.
Ongoing Legal and Regulatory Challenges
The attempted merger between Trump Media and Digital World Acquisition has faced numerous obstacles over the past two years, including ongoing Securities and Exchange Commission (SEC) investigations into potential securities violations. These legal challenges have contributed to delays in the merger process, complicating the path to final shareholder approval scheduled for March 22.
Amidst mounting legal hurdles and contentious disputes, the outcome of the shareholder vote remains uncertain, with Litinsky and Moss’s lawsuit adding further complexity to the already contentious merger negotiations.
