Judge Denies Sanction Bid by Truth Social Co-Founders Over Share Value

The co-founders of Donald Trump’s social-media startup lost a bid to have a Delaware judge impose financial sanctions on the former president and his lawyers for alleged misconduct in a suit over the value of their shares.

Andy Litinsky and Wes Moss, who hold an 8.6% stake in Trump Media & Technology Group Corp., argued sanctions were warranted because Trump and his team allegedly violated a court order in Delaware by filing a separate suit against them in Florida. On Tuesday, Delaware Chancery Court Judge Morgan Zurn disagreed.

At a hearing in Wilmington, the judge said the court order didn’t bar Trump from suing in Florida and that there was nothing sanctionable.

Shares in Trump Media have fluctuated wildly since it went public through a merger with a special-purpose acquisition company in March. Trump, who owns most of the company’s shares, has seen the value of his stake fall by billions of dollars from a post-merger peak as he campaigns to return to the White House.

Shares of Trump Media were trading at $21.16 on Tuesday at 11:50 p.m. New York time, near their post-merger all time low.

Litinsky and Moss — former contestants on Trump’s TV show The Apprentice — filed the Delaware suit in February claiming that Trump was planning to dilute their stake in the firm. Trump then struck a deal in which he agreed to not block the men from accessing their shares in the company while the case progressed — a deal that was memorialized in a court order by a Delaware judge.

Trump then filed his own suit against the men in Florida. He claims Litinsky and Moss don’t deserve their 8.6% stake — once valued at more than $600 million — because they violated an agreement about Trump Media’s setup. The fight for sanctions arose after Litinsky and Moss said Trump’s Florida lawsuit violated the earlier agreement to not block them from accessing their shares.

The Florida case is Trump Media & Technology Group v. United Atlantic Ventures, Florida Circuit Court, 12th Judicial Circuit (Sarasota). The Delaware case is United Atlantic Ventures v Trump Media, 2024-0184, Delaware Chancery Court (Wilmington).

Top photo: The Truth Social app on a smartphone arranged in New York, US, on Friday, March 22, 2024. Shareholders of Digital World Acquisition Corp., a publicly traded shell company, approved a deal to merge with the Trump’s media business in a Friday vote. That means Trump Media & Technology Group, whose flagship product is social networking site Truth Social, will soon begin trading on the Nasdaq stock market, reported the AP. Photographer: Gabby Jones/Bloomberg.