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Amid a tumultuous period for Donald Trump, the legal battle surrounding his social media startup has intensified as the founders of the website are now legally contesting a six-month bar on selling their shares, a move they attribute to retaliation by Trump.
A Delaware judge has permitted the inclusion of the new complaint brought by Truth Social founders Andy Litinsky and Wes Moss in a broader lawsuit challenging the valuation of their stakes, according to a Bloomberg report issued Tuesday.
The legal strife unfolds as Trump grapples with multiple criminal charges and efforts to reestablish his political influence.
Litinsky and Moss, according to the report, argue that the lockup period is causing them "irreparable harm." Trump himself, holding nearly a 60 percent stake, is similarly bound by a six-month sales restriction on his shares.
Attorneys for Trump Media argued that the enforcement of share lockups is a standard practice in transactions involving companies like Digital World Acquisition Corp (DWAC), the report said, and that permitting the co-founders to sell off their shares prematurely would negatively impact both the company and its other shareholders.
The restriction was highlighted in a Delaware court where Judge Sam Glasscock III acknowledged that their new claims would substantially modify the existing case, which originally aimed to prevent Trump Media's merger with DWAC.
Litinsky and Moss are also seeking to block a separate lawsuit Trump initiated against them in Florida, accusing them of botching Trump Media's setup prior to its merger. They argue the lawsuit is an attempt to sidetrack their Delaware legal challenge and should have been filed in the same jurisdiction.
Newsweek has sought comment from Truth Social through its designated investor relations channel on Tuesday.
Despite the seeming financial boon from the merger, Trump Media has seen its value drop by nearly $3 billion, marked by the company's tumbling stock price, which has fallen nearly 25 percent since it began trading under the former president's initials, DJT, on March 25.
Amidst his corporate disputes, Trump faces mounting legal pressures elsewhere.
One of the most immediate challenges for Trump is his upcoming hush money trial set to begin on April 15. The case, which involves allegations of Trump hiding payments to adult film actress Stormy Daniels, has been mired in controversy, including Trump's call for the presiding judge, Juan M. Merchan, to recuse himself due to perceived biases.
Despite attempts to delay, the trial will proceed as scheduled, with Trump facing 34 counts of falsifying business records.
Adding to Trump's legal entanglements is a case concerning the alleged illegal retention of classified documents at his Mar-a-Lago estate, where he is facing 40 felony counts. Trump has denied wrongdoing.
Former U.S. acting solicitor general Neal Katyal believes the former president will "almost certainly" be convicted in both criminal cases.
About the writer
Aj Fabino is a Newsweek reporter based in Chicago. His focus is reporting on Economy & Finance. Aj joined Newsweek ... Read more