- The co-founders of Trump Media & Technology Group accused the company of conspiring to dilute their stock.
- Former “The Apprentice” contestants Andy Litinski and Wes Moss pitched the venture in 2021.
- The lawsuit could complicate future shareholder votes 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 strip them of hundreds of millions of dollars worth of stock ahead of a merger.
Andy Litinsky and Wes Moss, who met Trump when he was a cast member on “The Apprentice,” filed the lawsuit through their partner United Atlantic Ventures (UAV).
The lawsuit, obtained by The Washington Post, alleges that Trump and other executives used “eleventh-hour, pre-merger corporate maneuvering” to dilute the company's stock.
Trump Media's press office did not immediately respond to a request for comment from Business Insider outside of normal business hours.
The lawsuit is the latest of three that could complicate future shareholder votes on the company's long-pending merger to take it public.
The bid would see Trump's company, the parent company of his social media network Truth Social, merge with blank check company Digital World Acquisition.
According to the Post, Liczynski and Moss first pitched a Trump-branded media startup in 2021 after Trump was banned from Twitter, giving Trump a 90% stake and 8.6% for UAV. It is said that they have agreed to a contract.
The new lawsuit alleges that Mr. Trump and other leaders are seeking to increase the amount of stock they can issue from 120 million to 1 billion shares, which would allow Mr. Liczynski and Mosz to move ahead of the merger. He claims that his stake will be reduced to less than 1%.
At Thursday's stock price, Trump's combined stock is worth more than $3 billion, while UAV's stock is worth nearly $300 million, according to Digital World's filing with the Securities and Exchange Commission.
The amount would be a welcome financial boost for the former president, who is facing massive legal costs exceeding $450 million.
The complaint also alleges that the Trump Media board planned to give new stock to “Trump and/or his associates and children,” according to the paper.
The outlet previously reported that President Trump called Liczynski in October 2021 and asked if he would be willing to give some of his stock to Trump's wife, Melania, but he refused.
Mr. Liczynski and Mr. Moss left Trump Media shortly after UAV launched after a dispute with company management, but retained their shares, according to Digital World SEC filings.
Trump Media's two-year planned merger with Digital World Acquisition Corp. faces continued delays, in part due to an SEC investigation into potential securities violations.
The merger remains complicated as legal hurdles continue to mount ahead of a final shareholder vote on March 22nd.
