Trump’s Truth Social Allies Turned Foes Dealt Setback in Court

Greg Farrell, Bloomberg News

The Truth Social logo on a laptop 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 , Bloomberg

(Bloomberg) -- Donald Trump defeated a move by Trump Media & Technology Group Corp.’s co-founders to halt his lawsuit accusing them of botching the setup of his newly public social media company.

The former president and two ex-contestants on his once-popular reality TV show The Apprentice, Andy Litinsky and Wes Moss, are suing each other over how much of stake the two men should get in Trump Media. Litinsky and Moss had helped Trump launch his Truth Social platform in 2021 after he had been banned by Twitter and Facebook in the wake of the Jan. 6 riot.

On Tuesday, a Delaware judge refused to block Trump from proceeding with his suit in Florida against Litinsky and Moss, saying she would not go along with what she called a “remarkable” request to intervene in a court action brought in another state.

The court fight is playing out after the social media company’s meteoric stock gains made the former president billions on paper, and then a rapid selloff wiped out more than two-thirds of the advance. The showdown between Trump and his former allies is one of several ongoing legal battles around Trump Media.

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In their Delaware complaint, Litinsky and Moss allege Trump is trying to dilute their 8.6% stake in Trump Media. They claim that the suit filed by Trump in Florida is an attempt to derail the Delaware case.

In his Florida complaint, Trump alleges that Litinsky and Moss violated an agreement about the setup of Trump Media and don’t deserve their stake at all.

Following a 90-minute telephone hearing, Delaware Chancery Court Judge Morgan Zurn said she will honor the principle that judges don’t interfere with cases filed in other states. She also refused to fast-track pretrial information sharing in the case against Trump, and turned down a request by Litinsky and Moss to be freed up from the the six-month lock-up period adopted by Trump Media after its merger in March with a blank-check firm, Digital World Acquisition Corp.

Zurn said the Delaware case is about monetary damages and doesn’t require her to issue any immediate injunctions. If she finds merit in the claims by Litinsky and Moss, she could allow them to seek a deposition from Trump.

The merger of Trump’s company with DWAC added billions of dollars — at least on paper — to Trump’s net wealth. Trump Media’s stock price surged in its first days of trading touching $78 per share, before slumping below $23. On Tuesday, it was trading up 7.3% at $50.08 at 3:39 pm in New York. Trump, who owns a nearly 60% stake, is also subject to a lockup agreement that prevents him from selling for six months.

--With assistance from Jef Feeley.