The media company founded by Donald Trump has filed a lawsuit against its co-founders, Wesley Moss and Andrew Litinsky, accusing them of failing to successfully launch the company and attempting to disrupt the merger deal. The lawsuit seeks to prevent Moss and Litinsky from appointing members to the company’s board or owning any shares. Moss and Litinsky claim an agreement signed with Trump entitles them to an 8.6% share of the company, which could be worth about $601 million based on the company’s closing price. Litigation between the parties began in February in Delaware Chancery Court.
After Digital World Acquisition Corp. shareholders approved a merger with Trump Media, the company went public under the ticker DJT and saw a significant increase in its stock price. However, the stock price fell following the disclosure of a $58.2 million net loss in 2023. Trump Media’s lawsuit in Florida seeks damages for alleged breaches of fiduciary duty by Moss, Litinsky, and Patrick Orlando, founder of DWAC. Trump Media claims Moss and Litinsky failed in their responsibilities related to the corporate structure, launching Truth Social, and selecting a merger shell company.
The lawsuit alleges that Moss and Litinsky made poor decisions that harmed Trump Media and caused a decline in DWAC stock price. Despite a conflict of interest, they pursued a merger with Orlando’s company, Benessere Capital Acquisition Corp., triggering an investigation by the SEC. The lawsuit claims that Moss and Litinsky retaliated against Trump Media by suing the company on the eve of the DWAC merger vote. Trump Media disputes the claim that UAV is owed stock and argues that the agreement with UAV signed by Trump in 2021 is no longer valid.
According to Trump Media, Eric Trump notified UAV in July 2021 that the agreement had been deemed void by his father. Trump Media alleges that UAV accepted this decision. The lawsuit contends that Litinsky and Moss have breached their obligations and caused significant damage to the company. Litinsky, Moss, and Orlando are all named as co-defendants in the lawsuit. Lawyers for Trump Media did not respond immediately to requests for comment, and Litinsky and Moss could not be reached.
The legal dispute between Trump Media and its co-founders stems from disagreements regarding ownership stakes, corporate governance issues, and the handling of the merger process. The lawsuit highlights the challenges faced by companies seeking to go public through a merger, as well as the potential conflicts of interest that can arise in such transactions. Trump Media’s claims of breaches of fiduciary duty and retaliatory actions by Litinsky and Moss underscore the complex dynamics at play in the business world. The outcome of the lawsuit will likely have significant implications for the future operations and governance of Trump Media and its social media app, Truth Social.
