A lawsuit filed on Wednesday may jeopardize a $4 billion commercial deal involving former President Donald Trump’s social media venture. The complaint accuses Trump of lowering the co-founders’ stake in the corporation. The co-founders of Truth Social have taken legal action against Donald Trump, accusing him of diluting the platform’s shares.
Andy Litinsky and Wes Moss, co-founders of Trump’s Truth Social platform, have sued Trump in Delaware
Andy Litinsky and Wes Moss, co-founders of Trump’s Truth Social platform, have sued Trump in Delaware, claiming that their original 8.6% share in Trump Media & Technology Group (TMTG) has been reduced to less than 1%, according to The Washington Post and CNBC.
The legal struggle occurs as TMTG prepares to combine with Digital World Acquisition Corp., a publicly traded blank check company. The transaction, which is subject to Digital World shareholders’ approval next month, may value TMTG at up to $4 billion, according to The New York Times.
“The attempt here is to deprive them of the deal,” said Christopher J. Clark, the lawyer for Litinsky and Moss’ firm, United Atlantic Ventures (UAV), in the lawsuit.
“They went out and did the work, they created Truth Social, and now the beneficiary of that, Donald Trump, doesn’t want to pay.”
Trump’s UAV deal is at risk
According to The Washington Post, a court petition seeking a quick trial in the case revealed that under the first arrangement, Trump would receive 78 million shares worth around $3.5 billion at today’s market prices. UAV would receive more than 7 million shares, worth approximately $339 million.
However, Digital World stated in a filing with the Securities and Exchange Commission earlier this month that a Trump lawyer voided the arrangement with UAV more than two years ago.
The stock sale might provide a significant financial boost to Trump, who has suffered multiple legal losses since leaving the White House, including a $355 million verdict, plus interest, for committing business fraud in New York.
On Wednesday, an appeals court judge denied Trump’s bid to postpone the verdict’s execution. Trump, who is currently leading the Republican presidential nomination campaign, said he lacked the funds to pay the charge.
