April 23, 2024

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Former 'Interns' Sue Trump Media Over Alleged Stock Dilution Scheme

Former 'Interns' Sue Trump Media Over Alleged Stock Dilution Scheme

Andy Letinsky, Wes Moss (left), and Donald Trump (right).
Dimitrios Kambouris/WireImage for Vogue via Getty Images, Justin Sullivan via Getty Images

  • The founders of Trump Media and Technology Group accused the company of conspiring to dilute its shares.
  • Andy Letinsky and Wes Moss, former contestants on The Apprentice, pitch the project 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 Letinsky and Wes Moss, who met Trump when they were contestants on The Apprentice, filed the lawsuit through their partnership United Atlantic Ventures (UAV).

In the lawsuit, seen by The Washington Post, they alleged that executives, including Trump, were using… “The eleventh hour, corporate maneuvering before the merger.” To 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 submitted outside regular business hours.

The lawsuit is the latest of three that could complicate an upcoming shareholder vote on a long-awaited merger that would take the company public.

The bid will see Trump's company, the parent company of his social media network Truth Social, merge with Digital World Acquisition.

Letinsky and Moss first came to Trump in 2021 with an offer to create a Trump-branded media startup after he was banned from Twitter, and agreed to a deal that gave Trump a 90% stake and UAV 8.6%, according to The Post.

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The new lawsuit alleges that Trump and other leaders sought to increase the amount of authorized shares from 120 million shares to 1 billion shares, which would reduce Letinsky and Moss' stake to less than 1% before the merger, the report said.

According to a Securities and Exchange Commission filing from Digital World, Trump's shares will be worth more than $3 billion after the merger at Thursday's share price, while UAV's stake will be worth about $300 million.

This amount would be a welcome financial boost to the former president, who faces huge legal costs More than $450 million.

The lawsuit also alleges that Trump's media board planned to award new shares to “Trump and/or his associates and children,” according to The Post.

The newspaper previously reported that Trump called Laitinsky in October 2021 to ask if he would do so He transfers some of his shares to Trump's wife, Melania And he refused.

Litinsky and Moss left Trump Media shortly after UAV went live after a dispute with company leaders, but kept their shares, according to a Digital World SEC filing.

A two-year merger attempt between Trump Media and Digital World Acquisition Corp. has faced persistent delays, in part due to Securities and Exchange Commission investigations into potential securities violations.

Before the final shareholder vote on March 22, the merger still faces complications as legal hurdles continue to mount.