Legal fight over Trump Media’s ownership adds to its woes
By Matthew Goldstein and David Yaffe-Bellany
Twenty years ago, Wes Moss and Andy Litinsky met Donald Trump as contestants on his reality TV show The Apprentice – a connection that led them to help launch the former president’s social media platform, Truth Social, with his blessing.
Now, they might as well be starring in an episode of Family Feud.
For weeks, Moss and Litinsky have been fighting with Trump Media & Technology Group, the parent company of Truth Social, over their roughly 8 per cent stake in the company. In February, they sued the company, claiming that Trump Media – which made its trading debut last month at an $US8 billion ($12.5 billion) valuation – was trying to deprive them of the full value of their shares. Now they also claim the company is trying to prevent them from selling those shares.
Trump firing a contestant in a season of ‘The Apprentice’.Credit: Screenshot
In a separate lawsuit that followed, Trump Media claimed that Moss and Litinsky should forfeit their shares because their poor decision-making had contributed to a years-long delay in its merger with Digital World Acquisition Corp. Trump Media agreed to merge with Digital World, a cash-rich shell company, in 2021 as a way to go public, but the deal closed only in March.
The pair’s stake is worth more than $US220 million based on the current $US26 share price of Trump Media, compared with $US2 billion for Trump. Overall, the stock has fallen about 62 per cent from where it began trading on March 26.
The litigation provides a portrait of some of the chaos that has bedevilled Trump Media since its inception. The lawsuits are also a distraction for the fledgling company, which is struggling to show that it is a viable business rather than a money-losing entity whose value is derived solely from Trump’s presence on its flagship platform. On Tuesday, the company announced plans to launch a streaming video service to draw in more users.
Moss, now an Atlanta financial planner and radio host, and Litinsky, a conservative media personality, met Trump during the second season of The Apprentice, which ran for 15 episodes in 2004. Trump “fired” the two men in weeks 11 and 12. Litinsky would later take a job as president of Trump’s television production company.
Just weeks after Trump left the White House in early 2021, Moss and Litinsky pitched him on creating a social media company. They came up with the idea after Twitter, now X, and other social media platforms banned Trump in the aftermath of the January 6 riot at the US Capitol.
The two men convinced him that if he started his own company, he wouldn’t have to worry about being censored and his supporters would follow him to the new platform. Trump was intrigued enough to lend his name to the effort in exchange for a majority stake in the company. He didn’t invest any of his own money.
Wes Moss when part of The Apprentice, in 2004.Credit: Getty Images
The parties drew up an agreement that authorised United Atlantic Ventures, a company set up by Moss and Litinsky, to put the plan in motion. In return, they were promised an equity stake in Trump Media.
Moss and Litinsky, who were on Trump Media’s board, were instrumental in negotiating the October 2021 merger agreement with Digital World, a special purpose acquisition company, or SPAC, that had raised $US300 million in an initial public offering. SPACs raise money in an IPO in order to buy an existing company such as Trump Media, allowing the operating business to go public.
In February 2022, Truth Social made its debut, quickly becoming the former president’s main online megaphone.
Things soon began to go south, not long after Trump appointed Devin Nunes, the former Republican congressman from California, as Trump Media’s CEO. By that summer, Moss had resigned from the company’s board; Litinsky had done so earlier.
In their lawsuit, filed in Delaware Chancery Court, the two men claimed that their relationship with Trump Media had soured after Litinsky refused Trump’s request to give some shares to his wife, Melania, long before the company began to trade.
Trump Media has claimed in its lawsuit, filed in March in Florida state court, that Moss and Litinsky “failed spectacularly at every turn.” The suit blamed the men for the poor rollout of Truth Social, which was marred by technical glitches that Trump Media said had generated “hostile” press coverage. Trump Media also said some of the actions of Moss and Litinsky had contributed to an investigation by the Securities and Exchange Commission that delayed the merger.
Christopher Clark, a lawyer for United Atlantic, said Trump Media’s lawsuit against his clients was “meritless”. He said that if Trump Media had any claims against his clients, it should bring them before the Delaware court rather than in a separate lawsuit in Florida.
This month, the judge in the Delaware proceeding, Vice Chancellor Sam Glasscock III, questioned the rationale for filing a suit in Florida, saying he was “dumbfounded”.
Samuel Salario, a lawyer for Trump Media, said that the company’s “complaint speaks for itself”, and that Trump Media would prevail in court.
The Apprentice contestant Andy Litinsky.Credit: Getty Images
In their lawsuit, Moss and Litinsky claimed their right to 8 per cent of Trump Media’s shares and the ability to sell them immediately. They alleged that Trump Media had unfairly barred their company, United Atlantic, from selling any shares for six months, just as the merger with Digital World was being completed. The timing of the action was punitive and “retaliatory”, Moss and Litinsky alleged.
Trump Media has argued that the lockup is consistent with how other large shareholders are being treated and that, in any event, the two men forfeited their rights to those shares. The six-month lock-up imposed on United Atlantic is similar to a share-selling restriction that also applies to Trump and investors who backed Digital World before the SPAC went public in 2021.
Legal experts said it was not unusual for founders of a company that went public to become embroiled in a battle over who should get the most shares.
“It’s all about dividing the pie but not about the fate of the pie itself,” said Usha Rodrigues, a professor of corporate law at the University of Georgia School of Law. “Donald Trump is still going to be in control. It’s just about sorting out the pieces.”
Moss and Litinsky aren’t the only ones fighting in court over their equity stake.
Patrick Orlando, the former CEO of Digital World, is also suing to get more shares of Trump Media, claiming the SPAC’s board wrongly cast him aside a year before the merger was completed.
Orlando was pushed out in the middle of the SEC investigation, in which regulators said early merger negotiations between Digital World and Trump Media had violated federal securities laws. The SEC did not charge him with any wrongdoing, and Digital World eventually reached an $18 million settlement with regulators.
Orlando and his lawyers did not respond to requests for comment.
In claiming that Moss and Litinsky’s actions contributed to the regulatory investigation, the Trump Media lawsuit said the two men were apprehensive of how Orlando was conducting the merger talks but continued to negotiate with him anyway.
The suit noted that after one meeting with Orlando in April 2021, Litinsky wrote in his notes: “I get scared, is he wearing a wire?”
This article originally appeared in The New York Times.
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