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- The co-founders of Trump Media & Technology Group accused the company of conspiring to dilute their shares.
- Former “The Apprentice” contestants Andy Litinsky and Wes Moss launched the company in 2021.
- The lawsuit could complicate an upcoming shareholder vote on a merger that would take the company public.
Two co-founders of former President Donald Trump’s media company have filed a lawsuit alleging that company executives planned to deprive them of stock that could be worth hundreds of millions of dollars ahead of a potential merger.
Andy Litinsky and Wes Moss, who met Trump when they were contestants on “The Apprentice,” filed the lawsuit through their company, United Atlantic Ventures (UAV).
The lawsuit, seen by The Washington Post, claimed that executives, including Trump, were using “Last minute, corporate maneuvers prior to the merger” dilute their stake in the business.
Trump Media’s press office did not immediately respond to a request for comment from Business Insider, which was made outside of normal business hours.
The lawsuit is the last of three that could complicate an upcoming shareholder vote on a long-pending merger that would take the company public.
The offer would see Trump’s company, the parent company of his social network Truth Social, merge with blank check company Digital World Acquisition.
Litinsky and Moss first went to Trump in 2021 with a proposal for a new Trump-branded media company after he was banned from Twitter, and agreed to a deal that gave Trump a 90% stake and a UAV of 8.6%, according to The Post.
The new lawsuit claims that Trump and other leaders attempted to increase the number of authorized shares from 120 million shares to 1 billion shares, which would reduce Litinsky and Moss’s stake to less than 1% before the merger, according to the report.
According to a Securities and Exchange Commission filing from Digital World, Trump’s shares would be worth more than $3 billion after the merger at Thursday’s stock price, while UAV’s stake would be worth nearly $300 million. .
The sum would be a welcome financial boost for the former president, who faces huge legal costs of more than 450 million dollars.
The lawsuit also claims that Trump Media’s board planned to award new shares to “Trump and/or his associates and children,” according to The Post.
The outlet previously reported that Trump had called Litinsky in October 2021 to ask if give up some of his shares to Trump’s wife, Melania, and that he had refused.
Litinsky and Moss left Trump Media shortly after UAV launched the business following a dispute with company leaders, but retained their shares, according to Digital World’s SEC filing.
The two-year attempted merger between Trump Media and Digital World Acquisition Corp has faced continued delays, in part due to SEC investigations into possible securities violations.
Ahead of a final shareholder vote on March 22, the merger still faces complications as legal hurdles continue to pile up.