Legal Hurdles Mount For Trump's Truth Social Deal At 11th Hour

A deal that could net former President Donald Trump billions of dollars worth of stock is getting entangled in a series of last-minute lawsuits, potentially derailing its expected completion as the GOP front-runner’s own legal woes mount.

Trump Media & Technology Group is slated to hold a final shareholder vote later this month to approve a long-pending merger that would bring the company behind Trump's Truth Social platform public. But recent lawsuits centered on the deal are sparking new questions about the merger's completion, at least in the near term.

In one case, filed in Delaware Chancery Court, Trump Media co-founders Andy Litinsky and Wes Moss, both one-time contestants on The Apprentice, sued the company for an alleged scheme to dilute their 8.6 percent stake in the business. Meanwhile, Digital World Acquisition — Trump Media’s partner in the planned combination — is squaring off with its one-time chief executive, Patrick Orlando, in dueling lawsuits over how much stock in the combined company is owed to Orlando's ARC Global Investments II, according to a filing with the Securities and Exchange Commission.

The Trump Media and Digital World merger has taken on new significance in recent weeks as a potentially lucrative source of capital for Trump, who is facing more than $500 million in civil judgments. With more than 78 million shares allotted in the combined company, Trump could be in for a massive windfall: As of Friday morning, his stock would have been valued at roughly $3.2 billion.

"[The merger] represents a potential (and perhaps existential) liquidity event for Trump, which may explain his last-minute stock grab," lawyers representing Litinsky and Moss wrote in a filing on Wednesday.

Neither Trump Media nor Digital World responded to requests for comment.

Digital World has previously disclosed in regulatory filings that Orlando's issues with the shares could wind up affecting the deal's timeline. His company is now pressing the court to block the deal until the issue is resolved, the filing said.

Litinsky and Moss' lawyers separately urged the court to expedite the case given the looming March 22 vote to complete the transaction. In the filing, they argue that Trump Media is pushing to increase the amount of shares in the company to water down their stake. Trump Media has previously told Digital World that it "strongly disagrees" with claims that Litinsky and Moss have rights to, among other things, "anti-dilution protection for future issuances" of shares, according to Digital World filings.

While Trump is facing a growing legal bill, he cannot immediately cash out of his shares, if and when the deal closes. Securities laws would prevent him from selling massive amounts of stock all at once, and the deal's terms tie up his stake for six months — unless Digital World elects to waive the so-called lockup provision. Trump could, however, still transfer the stock into a trust.

The lawsuits represent the latest potential hurdle for Trump Media and Digital World's planned union, which was announced more than two years ago. Since then, the deal has been mired in regulatory issues. The SEC sued Digital World last year over misleading disclosures, resulting in an $18 million settlement.

Investors have shown interest in the deal, as evidenced by Digital World's stock price. As Trump's path to the Republican nomination became clearer over the last several months, shares in the company jumped to their highest levels in nearly two years.

Digital World's stock has since dropped following the news of the lawsuits. As of midday Friday, shares in the company were trading at about $39 — down from more than $50 two weeks ago.