(Bloomberg) — Donald Trump has ramped up a battle over shares in his newly public Trump Media & Technology Group Corp. with a lawsuit against his co-founders, claiming they violated an agreement setting up the social media company and shouldn’t get any stock in it at all.
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Andy Litinsky and Wes Moss don’t deserve their 8.6% stake, Trump argued in the suit, filed March 24 in Florida state court. The complaint, which hasn’t previously been reported, comes after the pair brought their own lawsuit against the former president in Delaware Chancery Court over their promised stake in the company.
The legal fight is playing out amid wild swings in shares of Trump Media, which began trading last week after it merged with a special purpose acquisition company, known as a SPAC. The stock dropped 21% Monday after Trump Media disclosed in a securities filing a $58 million loss and a relative trickle of revenue for 2023, and reiterated a warning that it needed the money from the SPAC deal to keep operating.
The stock was up nearly 6% Tuesday.
Trump claims Litinsky and Moss failed to properly set up the corporate governance structure of Trump Media, launch his Truth Social platform and find an appropriate merger partner. That failure hurt the company, he argues. He says they then “began ceaseless attempts to thwart” the blank check deal in the struggle for their respective stakes. In their own suit, the two say Trump was planning to seek millions of extra shares, diluting their stake.
Lawyers for Litinsky and Moss didn’t return emails seeking comment on Trump’s suit.
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Trump, the presumed Republican nominee in November’s presidential election, has seen his net worth soar due to his Trump Media stake, which he could ultimately use to pay off hundreds of millions of dollars in legal judgments against him — though he is currently unable to sell those shares for six months due to a lockup. Even with its slump, Trump Media currently has a market capitalization of $7.13 billion, and the larger his piece of it, the more money he could get. If the shares spiral, his payout would shrink.
Trump owns 57% of the company, according to the filings with the US Securities and Exchange Commission, with his stake now worth $4.06 billion on paper.
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The Delaware judge, Sam Glasscock III, declined to fast-track Litinsky and Moss’s suit after Trump’s lawyers agreed to avoid lessening the value of their shares. But at a hearing Monday the pair told the judge they plan to seek an order barring the Florida suit from going forward while they litigate claims that Trump planned to target their stake all along.
The judge said he was “gobsmacked” to learn of Trump’s Florida suit — which he filed instead of bringing counterclaims against the two in Glasscock’s own courtroom — and would consider possible sanctions against the former president in the Delaware case.
The Florida case is Trump Media & Technology Group v. United Atlantic Ventures, Florida Circuit Court, 12th Judicial Circuit (Sarasota).
—With assistance from Bailey Lipschultz.
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