Former President Donald Trump’s social media company is facing a lawsuit by its two co-founders, who claimed to be targeted by a scheme to “drastically dilute” their company shares that could be worth hundreds of millions of dollars.
The new legal challenge is tied to a much anticipated merger that would make Trump Media & Technology Group, the owner of Truth Social, a publicly traded company. The stock price of Digital World Acquisition, a shell company created for the sole purpose of acquiring Trump Media and take it public, has soared by a whopping 136 percent since the beginning of this year.
The complaint was filed Wednesday in the Delaware Court of Chancery by United Atlantic Ventures (UAV), a partnership founded by Andy Litinsky and Wes Moss, former contestants of President Trump’s reality show “The Apprentice.”
The pair pitched President Trump the idea of starting his own social media platform in February 2021, after he was banned from Twitter, now branded as X, according to a motion by UAV asking the court to expedite the suit. That motion details the claims in the complaint.
The deal purportedly gave President Trump 90 percent of the company’s share, while the co-founders and an attorney on the deal, Bradford Cohen, split the remaining 10 percent.
Mr. Litinsky and Mr. Moss would later leave Trump Media, but UAV retained its 8.6 percent stake, according to the motion.
However, UAV claimed that the former president and other company leaders recently attempted to “drastically dilute UAV’s interests,” in what the motion described as an “11th hour, pre-merger corporate maneuvering” to increase the amount of authorized stock from 120 million shares to one billion.
The alleged scheme would reduce UAV’s stake from 8.6 percent down to less than 1 percent, the motion said.
UAV is represented by Christopher Clark, a Washington lawyer who has advised Elon Musk and Hunter Biden.
“The attempt here is to deprive them of the deal,” Mr. Clark told CNBC, speaking of his clients in the Delaware case. “They actually went out and did the work, they created Truth Social, and now the beneficiary of that, Donald Trump, doesn’t want to pay.”
The Epoch Times has reached out to Trump Media for comment.
The upcoming merger, if approved by the Digital World shareholder this March, could provide much-needed relief as financial pressure on President Trump has mounted due to court rulings against him.
Within just a month, two judges in two separate cases ordered President Trump to pay an amount of more than $540 million.
In the more recent ruling, a New York judge found that the Republican presidential frontrunner and his co-defendants owe more than $355 million to the state for fraudulently overstating their assets on financial documents in order to get rates on bank loans they otherwise would not have been entitled to. Adding in interest, the final amount comes to $464 million.
On Wednesday, an appellate judge denied a request to pause the $464 million judgement until President Trump’s appeals of the civil fraud ruling are over. The judge, however, lifted a ban on his ability to get loans from New York banks, which could allow him to access the equity in his assets.
This is on top of the $83.3 million another New York City jury said Trump must pay E. Jean Carroll for defaming her when he denied her accusation of rape that she claimed occurred nearly 30 years ago.
President Trump maintained that those rulings are but part of the Democrats’ effort to financially drain their political enemies.
“The New York State CONSPIRACY (WITCH HUNT!) against Crooked Joe Biden’s Political Opponent, ME, is the greatest and most dangerous Political HOAX in the history of our Country!” he wrote in a Feb. 26 post at Truth Social.
