Trump Media & Technology Group, the parent company of Truth Social, has sued two of its co-founders, claiming they should forfeit their stakes in the company because of their mismanagement of the platform.
The lawsuit alleges that Mr. Moss and Mr. Litinsky—who were both contestants on President Trump’s reality TV show “The Apprentice”—failed “spectacularly” to establish corporate governance.
It states that they made “a series of reckless and wasteful decisions” when they tried to set up the company, causing “significant damage” to Trump Media and a decline in the stock price of its merger partner.
“UAV has recently claimed that under the Services Agreement, it is entitled to 8.6 percent of the Company’s total stock, free of dilution caused by issuance of new shares. That claim is baseless,” the suit reads.
“Although the Services Agreement—to which the Company is not a party—states that UAV was responsible for ensuring that the Company adopt corporate documents that contain provisions regarding dilution, UAV failed to do so. The Company’s corporate documents do not contain any such provisions,” it added.
The lawsuit also named Patrick Orlando, the former CEO of Digital World Acquisition Corp. (DWAC), as one of the defendants.
It alleges that the co-founders’ negotiations with Mr. Orlando for merger plans led to a Securities and Exchange Commission investigation, causing the merger to be “put on ice” for over a year and a half.
“This was a phenomenal opportunity for Moss and Litinsky,” the lawsuit said, accusing them of “riding President Trump’s coattails.”
“Without President Trump, Truth Social would have been impossible: President Trump’s national brand and the access to capital his business empire provided were the essential elements enabling the Company to be created,” it added.
Trump Media’s lawsuit follows a complaint filed by Mr. Moss and Mr. Litinsky in February, which sought to prevent President Trump from taking steps the two said would sharply reduce their combined 8.6 percent stake in the company. The pair filed their lawsuit in the Delaware Court of Chancery.
The lawsuit also targets Mr. Moss and Mr. Litinsky over their Delaware suit against the former president, saying that it was one of several attempts they made to block Trump Media’s ultimately successful plan to go public. Trump Media accomplished that goal by merging with the publicly traded company DWAC in March.
Trump Media shares have fluctuated wildly since its stock market debut. On Tuesday, the stock closed at $51.60, up 6 percent, valuing the entire company at $5.9 billion.
Truth Social was launched in February 2022, one year after President Trump was banned from major social platforms—including Facebook and X (formerly known as Twitter)—following the Jan. 6, 2021, breach of the U.S. Capitol. He has since been reinstated to both, but he has stuck with Truth Social as a megaphone for his message.
