Trump Media, launched after an insurrection, faces rebellion of its own
"Four lawsuits involving the founding boosters of Truth Social threaten to erode former president Donald Trump’s grasp on a massive financial haul
When former president Donald Trump’s Trump Media & Technology Group and its proposed merger partner, Digital World Acquisition, announced last month a shareholder vote on their long-delayed deal, it marked a final step for the owner of Truth Social to become a public company potentially worth billions of dollars — most of which is owned by Trump himself.
But in the lead-up to Friday’s vote, both companies have been rocked by legal warfare. Their leaders, past and present, have traded heated accusations of deception and impropriety across four lawsuits in three states. And the cases threaten to erode Trump’s grasp on a stake in the post-merger company potentially worth hundreds of millions of dollars — a possible financial lifeline, given that he owes more than $500 million in legal fines.
After Trump was booted from Twitter following the Jan. 6, 2021, insurrection, three men played pivotal roles in building and promoting Trump Media as an online challenger against the “cancel culture” of Big Tech: Andy Litinsky and Wes Moss, former “Apprentice” contestants who co-founded the company and launched Truth Social; and Patrick Orlando, who as chief executive of Digital World, a special purpose acquisition company, or SPAC, offered Trump’s company a path to investor cash.
But all three are now leading a rebellion of their own, confronting and potentially imperiling a trophy of Trump’s post-presidential ambitions. Their lawsuits call into question how Trump Media’s shares will be distributed, and a legal victory could chip away at Trump’s equity during a time when he is facing a cash crunch.
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The litigation won’t stop Friday’s shareholder meeting, during which Digital World has said it will announce whether a majority of investors voted to approve the merger. But the hundreds of pages of legal filings in the four cases offer clues to answers for some long-running questions about the companies’ inner workings and expose details of the turmoil that has characterized efforts to create a pro-Trump internet empire.
In the most recent lawsuit, filed Tuesday in a New York state court, Digital World asked a judge to force Orlando to vote in support of the merger, saying he could tank the deal by not voting shares owned by a company he controls — Digital World’s biggest founding investor, Arc Global Investments II.
“The merger vote is now less than one week away … and yet, Arc refuses to lodge its vote,” Digital World attorneys said in the complaint. If Digital World “fails to effectuate a merger, it will be forced to dissolve. Urgent relief is required by March 22 to avert such harm.”
Usha Rodrigues, a University of Georgia law professor who studies SPACs, said the level of turmoil was unusual for a deal like this. A merger vote, she said, is “typically a nonevent” because investors just want it to get done.
“SPAC mergers typically do not go like this,” she said. But “this whole process has been idiosyncratic, as everything has been with this SPAC.”
Trump Media attorney Jesse Binnall said in a statement Thursday, “These allegations simply add to the heap of false claims, defamation, and fake news about Truth Social for which the Washington Post is already being sued.”
Representatives for Trump’s presidential campaign, Digital World, Arc, Orlando, Litinsky and Moss did not respond to requests for comment.
The merger vote will be widely watched by observers of Trump’s finances. If the deal is approved, Trump would own about 60 percent of the post-merger company, a stake that at Digital World’s current price would be worth more than $3 billion.
That money could eventually go toward Trump’s high-profile legal penalties. He failed to finance an appeal bond for more than $450 million to cover a judgment in the New York attorney general’s business fraud case against him, his attorneys said Monday, citing “insurmountable difficulties.”
A lockup provision in the Trump Media merger agreement, however, would block Trump and other major investors from selling their shares for six months after the merger’s closing date, which could be as soon as Friday — unless Trump gets a waiver from Digital World or the post-merger Trump Media’s leaders allowing him to sell sooner. Such lockup periods are standard provisions in corporate deals, designed to instill confidence in investors that the leaders won’t sell before enough time has passed to see how the company performs.
Digital World’s stock price dropped this week to a two-month low before rebounding to about $43 — about 15 percent below its peak last month, when the Securities and Exchange Commission allowed the merger deal to proceed.
After a merger vote, the combined companies would go by Trump Media and trade under a new stock ticker symbol, DJT — Trump’s initials. That symbol was also used for Trump’s only other public company, Trump Hotels and Casino Resorts, whose stock plunged from nearly $35 to about 17 cents in less than a decade before the company filed for bankruptcy in 2004.
Two of the lawsuits, filed last month in Delaware, center on Trump Media’s stock. In one case, Arc sued Digital World, its new chief executive, Eric Swider, and three members of its board, saying they intended to improperly deprive Orlando of millions of previously guaranteed shares.
In a separate case, Litinsky and Moss sued Trump Media, claiming in a recently unsealed complaint that the company had authorized the issuing of 1 billion new shares of company stock — a move they say would dramatically dilute their stake, from 8.6 percent down to less than 1 percent.
Attorneys for Litinsky and Moss’s partnership, United Atlantic Ventures, said Trump intended to “use his domination and control” of the company’s board to place some or all of the new shares “in his own hands and those of [people] beholden to him.”
UAV’s attorneys argued in a motion that the alleged attempt, which Trump Media has disputed, was driven by Trump’s need for cash. The merger “represents a potential (and perhaps existential) liquidity event for Trump, which may explain his last-minute stock grab,” the motion said.
In their lawsuit, the men reiterated a claim, first reported by The Washington Post in 2022, that Trump had pressured Litinsky to hand over some of his shares to Trump’s wife, Melania. After Litinsky resisted, the lawsuit says, Trump pushed both men out. Trump Media said in 2022 that The Post’s report was based on “concocted psychodramas.”
In both cases, the judges rejected the plaintiffs’ requests to postpone the merger vote until their cases were resolved. Vice Chancellor Sam Glasscock III, in the UAV case, and Vice Chancellor Lori W. Will, in the Arc case, said putting the disputed shares into an escrow account, so that the lawsuits’ victors could take them over once the cases are finished, should suffice.
But both judges have also indicated they would prefer to resolve the disputes within a few months, meaning that the cases could shift the ownership for hundreds of millions of dollars’ worth of stock before the lockup period ends.
Digital World has warned investors that Arc could play a show-stopping role in the merger deal. As Digital World’s sponsor, Arc owns about 15 percent of its outstanding stock, including a majority of a stock class known as “founder shares,” according to an SEC filinglast month.
In the filing, Digital World said its relationship with Orlando had seen a “continued deterioration” and that, if Arc were to withhold votes supporting the merger, it could “lead to our liquidation.”
In a third lawsuit, filed in New York, Digital World sued to force Arc to vote in favor of the deal, saying Orlando could not hold the vote “hostage for his personal gain.” In a Monday email submitted as an exhibit in the case, Orlando wrote that Arc had been “repeatedly pressed” to vote before the meeting but that “Arc is not going to do that.”
In a fourth lawsuit, filed in Florida, Trump Media and Digital World returned fire at Arc and Orlando, saying the Miami financier had attempted a “blatant shakedown extortion effort” against the companies to maximize his personal stake.
An amended complaint Sunday, featuring the names of nine attorneys representing Trump Media and Digital World, alleged that Orlando and Arc’s “self-dealing, irrational and disturbing behavior” had “imposed massive costs” and caused “extensive reputational harm.”
They want to “extort more compensation in the merger by threatening to destroy it entirely — an existential threat to [Digital World] itself,” the complaint said.
The complaint blamed Orlando for the SEC investigation that Digital World agreed last year to pay $18 million to settle once the merger deal finalizes. It also alleged that the SEC sent Orlando a letter, known as a Wells notice, indicating that he could face charges for violating securities laws. (The SEC declined to comment.)
Orlando’s “reckless and irrational behavior,” the complaint said, had included withdrawing $15,000 in cash for unexplained expenses and leaking merger details to the press — an act that was exposed when Orlando “excused himself to take another phone call but forgot to mute the first call.”
In a video Will Wilkerson sent to the SEC, Digital World and Trump Media executives toast an investment deal on Oct. 26, 2021. (Video: Will Wilkerson)
The complaint also alleged that Orlando kept invoices and contracts in his personal email account, leading the company to omit multiple vendors from its financial reports. His mismanagement, it said, helped drive the company’s auditor to resign. (Trump Media sued The Post for $3.8 billion last year, saying the news organization had reported incorrectly on allegations concerning its financing. A federal judge in Florida dismissed the case this month but allowed Trump Media to amend its complaint if it believes it can state a viable claim.)
After Digital World’s board fired Orlando last March as its chief executive, Orlando discouraged people from investing in the company “based on his own personal grievances,” saying it was “his turn to make the life of the new CEO miserable,” the complaint said.
In recent months, Orlando has refused to resign from the Digital World board — a necessary step to allow for a new post-merger board — unless the company provides him shares and stock options, known as warrants, worth more than $222 million at the time of the lawsuit’s filing, according to the complaint.
Though Orlando was once a prominent Trump ally, even writing him a birthday letter in 2021 telling Trump he was “unaware of the extent of your brilliance,” the legal claims suggest the dispute has become deeply bitter and personal.
In the Florida case, a process server handed Orlando the summons papers one afternoon outside a private elementary school in the Miami neighborhood of Coconut Grove, a court filing shows. In a Delaware court hearing earlier this month, one of his attorneys said Orlando had been served when he was “getting off the bus from a field trip with his daughter, in front of her fifth grade class and their parents,” leaving the attorney “so taken aback," according to a hearing transcript.
Even more facts could come out in the weeks ahead. Orlando posted a photo last month to Truth Social showing him wearing a Truth Social hat with the caption “TRUTH! John 8:32” — a Bible verse that reads, “Then you will know the truth, and the truth will set you free.”
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