Delaware judge refuses to fast-track certain claims in post-merger lawsuit against Trump Media
A Delaware judge has granted a request from lawyers for Donald Trump and Trump Media & Technology Group, the parent company of his Truth Social platform, to delay a merger-related lawsuit filed by two of the company’s co-founders
DOVER, Del. — A Delaware judge granted a request from lawyers for Donald Trump and Trump Media on Tuesday & Technology Group, parent company of its Truth Social platform, wants to delay a lawsuit filed by two of the company’s co-founders.
Vice Chancellor Morgan Zurn said Andrew Litinsky and Wesley Moss, former contestants on Trump’s TV show “The Apprentice,” failed to justify putting certain claims in their lawsuit on an expedited route for judgment.
Litinsky and Moss filed a lawsuit in February alleging that Trump Media planned to dilute their stake in the company as part of a merger that it made public in late March. Another judge agreed to expedite that lawsuit given the looming merger date. However, plaintiffs’ concerns about the dilution of their limited liability company’s 8.6% stake in Trump Media were highlighted when defense attorneys assured the judge that the LLC, United Atlantic Ventures, had no merger-related would undergo dilution.
Following the merger, UAV filed a second amended complaint alleging that Trump and other defendants improperly imposed a “lock-up” provision that prevented UAV from selling its stock in the publicly traded company for six months. At the same time, they argued that the case should continue to be fast-tracked because they would suffer harm if they had to wait six months before they could sell their shares.
Zurn noted that UAV became aware of the lock-up provision on February 12 as a result of a filing that day with the Securities and Exchange Commission. That was followed by two other SEC filings documenting the lockup provision.
UAV also wanted Zurn to expedite arguments on its request for an “anti-suit injunction” banning Trump Media from filing a lawsuit in Florida against UAV. That lawsuit alleges that, due to mismanagement by Moss and Litinsky before the merger, UAV is not entitled to own stock in the newly publicly traded Trump Media company. The Florida lawsuit also challenges UAV’s claim that it has the right to appoint two directors to Trump Media’s board.
Lawyers for Trump Media argue that the Florida lawsuit does not violate the Delaware court order because UAV actually received the shares after the merger. They also say the location provision does not apply to Trump Media and Technology Group.
Zurn said she was reluctant to expedite arguments over whether the Florida lawsuit meets the venue provision, and whether the claims should be governed by Delaware law. However, she did say that arguments over whether the filing of the lawsuit in Florida violated the March 15 court order in Delaware “need to be heard expeditiously.”