Legal Fight Over Trump Media's Ownership Adds to Its Woes - The New York Times | Canada News Media
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Legal Fight Over Trump Media's Ownership Adds to Its Woes – The New York Times

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Twenty years ago, Wes Moss and Andy Litinsky met Donald J. Trump as contestants on his reality TV show, “The Apprentice” — a connection that led them to help launch the former president’s social media platform, Truth Social, with his blessing.

Now, they might as well be starring in an episode of “Family Feud.”

For weeks, Mr. Moss and Mr. Litinsky have been fighting with Trump Media & Technology Group, the parent company of Truth Social, over their roughly 8 percent stake in the company. In February, they sued the company, claiming that Trump Media — which made its trading debut last month at an $8 billion valuation — was trying to deprive them of the full value of their shares. Now they also claim the company is trying to prevent them from selling those shares.

In a separate lawsuit that followed, Trump Media claimed that Mr. Moss and Mr. Litinsky should forfeit their shares because their poor decision-making had contributed to a yearslong delay in its merger with Digital World Acquisition Corporation. Trump Media agreed to merge with Digital World, a cash-rich shell company, in 2021 as a way to go public, but the deal closed only in March.

The pair’s stake is worth more than $220 million based on the current $26 share price of Trump Media, compared with $2 billion for Mr. Trump. Overall, the stock has fallen about 62 percent from where it began trading on March 26.

The litigation provides a portrait of some of the chaos that has bedeviled Trump Media since its inception. The lawsuits are also a distraction for the fledgling company, which is struggling to show that it is a viable business rather than a money-losing entity whose value is derived solely from Mr. Trump’s presence on its flagship platform. On Tuesday, the company announced plans to launch a streaming video service to draw in more users.

Mr. Moss, now an Atlanta financial planner and radio host, and Mr. Litinsky, a conservative media personality, met Mr. Trump during the second season of “The Apprentice,” which ran for 15 episodes in 2004. Mr. Trump “fired” the two men in Weeks 11 and 12. Mr. Litinsky would later take a job as president of Mr. Trump’s television production company.

Just weeks after Mr. Trump left the White House in early 2021, Mr. Moss and Mr. Litinsky pitched him on creating a social media company. They came up with the idea after Twitter, now X, and other social media platforms barred Mr. Trump in the aftermath of the Jan. 6 riot at the U.S. Capitol.

The two men convinced him that if he started his own company, he wouldn’t have to worry about being censored and his supporters would follow him to the new platform. Mr. Trump was intrigued enough to lend his name to the effort in exchange for a majority stake in the company. He didn’t invest any of his own money.

The parties drew up an agreement that authorized United Atlantic Ventures, a company set up by Mr. Moss and Mr. Litinsky, to put the plan in motion. In return, they were promised an equity stake in Trump Media.

Mr. Moss and Mr. Litinsky, who were on Trump Media’s board, were instrumental in negotiating the October 2021 merger agreement with Digital World, a special purpose acquisition company, or SPAC, that had raised $300 million in an initial public offering. SPACs raise money in an I.P.O. in order to buy an existing company like Trump Media, allowing the operating business to go public.

In February 2022, Truth Social made its debut, quickly becoming the former president’s main online megaphone.

Things soon began to go south, not long after Mr. Trump appointed Devin Nunes, the former Republican congressman from California, as Trump Media’s chief executive. By that summer, Mr. Moss had resigned from the company’s board; Mr. Litinsky had done so earlier.

In their lawsuit, filed in Delaware Chancery Court, the two men claimed that their relationship with Trump Media had soured after Mr. Litinsky refused Mr. Trump’s request to give some shares to his wife, Melania, long before the company began to trade.

Trump Media has claimed in its lawsuit, filed in March in Florida state court, that Mr. Moss and Mr. Litinsky “failed spectacularly at every turn.” The suit blamed the men for the poor rollout of Truth Social, which was marred by technical glitches that Trump Media said had generated “hostile” press coverage. Trump Media also said some of the actions of Mr. Moss and Mr. Litinsky had contributed to an investigation by the Securities and Exchange Commission that delayed the merger.

Christopher Clark, a lawyer for United Atlantic, said Trump Media’s lawsuit against his clients was “meritless.” He said that if Trump Media had any claims against his clients, it should bring them before the Delaware court rather than in a separate lawsuit in Florida.

This month, the judge in the Delaware proceeding, Vice Chancellor Sam Glasscock III, questioned the rationale for filing a suit in Florida, saying he was “dumbfounded.”

Samuel Salario, a lawyer for Trump Media, said that the company’s “complaint speaks for itself,” and that Trump Media would prevail in court.

In their lawsuit, Mr. Moss and Mr. Litinsky claimed their right to 8 percent of Trump Media’s shares and the ability to sell them immediately. They alleged that Trump Media had unfairly barred their company, United Atlantic, from selling any shares for six months, just as the merger with Digital World was being completed. The timing of the action was punitive and “retaliatory,” Mr. Moss and Mr. Litinsky alleged.

Trump Media has argued that the lockup is consistent with how other large shareholders are being treated and that, in any event, the two men forfeited their rights to those shares. The six-month lockup imposed on United Atlantic is similar to a share-selling restriction that also applies to Mr. Trump and investors who backed Digital World before the SPAC went public in 2021.

Legal experts said it was not unusual for founders of a company that went public to become embroiled in a battle over who should get the most shares.

“It’s all about dividing the pie but not about the fate of the pie itself,” said Usha Rodrigues, a professor of corporate law at the University of Georgia School of Law. “Donald Trump is still going to be in control. It’s just about sorting out the pieces.”

Mr. Moss and Mr. Litinsky aren’t the only ones fighting in court over their equity stake.

Patrick Orlando, the former chief executive of Digital World, is also suing to get more shares of Trump Media, claiming the SPAC’s board wrongly cast him aside a year before the merger was completed.

Mr. Orlando was pushed out in the middle of the S.E.C. investigation, in which regulators said early merger negotiations between Digital World and Trump Media had violated federal securities laws. The S.E.C. did not charge him with any wrongdoing, and Digital World eventually reached an $18 million settlement with regulators.

Mr. Orlando and his lawyers did not respond to requests for comment.

In claiming that Mr. Moss and Mr. Litinsky’s actions contributed to the regulatory investigation, the Trump Media lawsuit said the two men were apprehensive of how Mr. Orlando was conducting the merger talks but continued to negotiate with him anyway.

The suit noted that after one meeting with Mr. Orlando in April 2021, Mr. Litinsky wrote in his notes: “I get scared, is he wearing a wire?”

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What to stream this weekend: ‘Civil War,’ Snow Patrol, ‘How to Die Alone,’ ‘Tulsa King’ and ‘Uglies’

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Hallmark launching a streaming service with two new original series, and Bill Skarsgård out for revenge in “Boy Kills World” are some of the new television, films, music and games headed to a device near you.

Also among the streaming offerings worth your time as selected by The Associated Press’ entertainment journalists: Alex Garland’s “Civil War” starring Kirsten Dunst, Natasha Rothwell’s heartfelt comedy for Hulu called “How to Die Alone” and Sylvester Stallone’s second season of “Tulsa King” debuts.

NEW MOVIES TO STREAM SEPT. 9-15

Alex Garland’s “Civil War” is finally making its debut on MAX on Friday. The film stars Kirsten Dunst as a veteran photojournalist covering a violent war that’s divided America; She reluctantly allows an aspiring photographer, played by Cailee Spaeny, to tag along as she, an editor (Stephen McKinley Henderson) and a reporter (Wagner Moura) make the dangerous journey to Washington, D.C., to interview the president (Nick Offerman), a blustery, rising despot who has given himself a third term, taken to attacking his citizens and shut himself off from the press. In my review, I called it a bellowing and haunting experience; Smart and thought-provoking with great performances. It’s well worth a watch.

— Joey King stars in Netflix’s adaptation of Scott Westerfeld’s “Uglies,” about a future society in which everyone is required to have beautifying cosmetic surgery at age 16. Streaming on Friday, McG directed the film, in which King’s character inadvertently finds herself in the midst of an uprising against the status quo. “Outer Banks” star Chase Stokes plays King’s best friend.

— Bill Skarsgård is out for revenge against the woman (Famke Janssen) who killed his family in “Boy Kills World,” coming to Hulu on Friday. Moritz Mohr directed the ultra-violent film, of which Variety critic Owen Gleiberman wrote: “It’s a depraved vision, yet I got caught up in its kick-ass revenge-horror pizzazz, its disreputable commitment to what it was doing.”

AP Film Writer Lindsey Bahr

NEW MUSIC TO STREAM SEPT. 9-15

— The year was 2006. Snow Patrol, the Northern Irish-Scottish alternative rock band, released an album, “Eyes Open,” producing the biggest hit of their career: “Chasing Cars.” A lot has happened in the time since — three, soon to be four quality full-length albums, to be exact. On Friday, the band will release “The Forest Is the Path,” their first new album in seven years. Anthemic pop-rock is the name of the game across songs of love and loss, like “All,”“The Beginning” and “This Is the Sound Of Your Voice.”

— For fans of raucous guitar music, Jordan Peele’s 2022 sci-fi thriller, “NOPE,” provided a surprising, if tiny, thrill. One of the leads, Emerald “Em” Haywood portrayed by Keke Palmer, rocks a Jesus Lizard shirt. (Also featured through the film: Rage Against the Machine, Wipers, Mr Bungle, Butthole Surfers and Earth band shirts.) The Austin noise rock band are a less than obvious pick, having been signed to the legendary Touch and Go Records and having stopped releasing new albums in 1998. That changes on Friday the 13th, when “Rack” arrives. And for those curious: The Jesus Lizard’s intensity never went away.

AP Music Writer Maria Sherman

NEW SHOWS TO STREAM SEPT. 9-15

— Hallmark launched a streaming service called Hallmark+ on Tuesday with two new original series, the scripted drama “The Chicken Sisters” and unscripted series “Celebrations with Lacey Chabert.” If you’re a Hallmark holiday movies fan, you know Chabert. She’s starred in more than 30 of their films and many are holiday themed. Off camera, Chabert has a passion for throwing parties and entertaining. In “Celebrations,” deserving people are surprised with a bash in their honor — planned with Chabert’s help. “The Chicken Sisters” stars Schuyler Fisk, Wendie Malick and Lea Thompson in a show about employees at rival chicken restaurants in a small town. The eight-episode series is based on a novel of the same name.

Natasha Rothwell of “Insecure” and “The White Lotus” fame created and stars in a new heartfelt comedy for Hulu called “How to Die Alone.” She plays Mel, a broke, go-along-to-get-along, single, airport employee who, after a near-death experience, makes the conscious decision to take risks and pursue her dreams. Rothwell has been working on the series for the past eight years and described it to The AP as “the most vulnerable piece of art I’ve ever put into the world.” Like Mel, Rothwell had to learn to bet on herself to make the show she wanted to make. “In the Venn diagram of me and Mel, there’s significant overlap,” said Rothwell. It premieres Friday on Hulu.

— Shailene Woodley, DeWanda Wise and Betty Gilpin star in a new drama for Starz called “Three Women,” about entrepreneur Sloane, homemaker Lina and student Maggie who are each stepping into their power and making life-changing decisions. They’re interviewed by a writer named Gia (Woodley.) The series is based on a 2019 best-selling book of the same name by Lisa Taddeo. “Three Women” premieres Friday on Starz.

— Sylvester Stallone’s second season of “Tulsa King” debuts Sunday on Paramount+. Stallone plays Dwight Manfredi, a mafia boss who was recently released from prison after serving 25 years. He’s sent to Tulsa to set up a new crime syndicate. The series is created by Taylor Sheridan of “Yellowstone” fame.

Alicia Rancilio

NEW VIDEO GAMES TO PLAY

— One thing about the title of Focus Entertainment’s Warhammer 40,000: Space Marine 2 — you know exactly what you’re in for. You are Demetrian Titus, a genetically enhanced brute sent into battle against the Tyranids, an insectoid species with an insatiable craving for human flesh. You have a rocket-powered suit of armor and an arsenal of ridiculous weapons like the “Chainsword,” the “Thunderhammer” and the “Melta Rifle,” so what could go wrong? Besides the squishy single-player mode, there are cooperative missions and six-vs.-six free-for-alls. You can suit up now on PlayStation 5, Xbox X/S or PC.

— Likewise, Wild Bastards isn’t exactly the kind of title that’s going to attract fans of, say, Animal Crossing. It’s another sci-fi shooter, but the protagonists are a gang of 13 varmints — aliens and androids included — who are on the run from the law. Each outlaw has a distinctive set of weapons and special powers: Sarge, for example, is a robot with horse genes, while Billy the Squid is … well, you get the idea. Australian studio Blue Manchu developed the 2019 cult hit Void Bastards, and this Wild-West-in-space spinoff has the same snarky humor and vibrant, neon-drenched cartoon look. Saddle up on PlayStation 5, Xbox X/S, Nintendo Switch or PC.

Lou Kesten

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Trump could cash out his DJT stock within weeks. Here’s what happens if he sells

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Former President Donald Trump is on the brink of a significant financial decision that could have far-reaching implications for both his personal wealth and the future of his fledgling social media company, Trump Media & Technology Group (TMTG). As the lockup period on his shares in TMTG, which owns Truth Social, nears its end, Trump could soon be free to sell his substantial stake in the company. However, the potential payday, which makes up a large portion of his net worth, comes with considerable risks for Trump and his supporters.

Trump’s stake in TMTG comprises nearly 59% of the company, amounting to 114,750,000 shares. As of now, this holding is valued at approximately $2.6 billion. These shares are currently under a lockup agreement, a common feature of initial public offerings (IPOs), designed to prevent company insiders from immediately selling their shares and potentially destabilizing the stock. The lockup, which began after TMTG’s merger with a special purpose acquisition company (SPAC), is set to expire on September 25, though it could end earlier if certain conditions are met.

Should Trump decide to sell his shares after the lockup expires, the market could respond in unpredictable ways. The sale of a substantial number of shares by a major stakeholder like Trump could flood the market, potentially driving down the stock price. Daniel Bradley, a finance professor at the University of South Florida, suggests that the market might react negatively to such a large sale, particularly if there aren’t enough buyers to absorb the supply. This could lead to a sharp decline in the stock’s value, impacting both Trump’s personal wealth and the company’s market standing.

Moreover, Trump’s involvement in Truth Social has been a key driver of investor interest. The platform, marketed as a free speech alternative to mainstream social media, has attracted a loyal user base largely due to Trump’s presence. If Trump were to sell his stake, it might signal a lack of confidence in the company, potentially shaking investor confidence and further depressing the stock price.

Trump’s decision is also influenced by his ongoing legal battles, which have already cost him over $100 million in legal fees. Selling his shares could provide a significant financial boost, helping him cover these mounting expenses. However, this move could also have political ramifications, especially as he continues his bid for the Republican nomination in the 2024 presidential race.

Trump Media’s success is closely tied to Trump’s political fortunes. The company’s stock has shown volatility in response to developments in the presidential race, with Trump’s chances of winning having a direct impact on the stock’s value. If Trump sells his stake, it could be interpreted as a lack of confidence in his own political future, potentially undermining both his campaign and the company’s prospects.

Truth Social, the flagship product of TMTG, has faced challenges in generating traffic and advertising revenue, especially compared to established social media giants like X (formerly Twitter) and Facebook. Despite this, the company’s valuation has remained high, fueled by investor speculation on Trump’s political future. If Trump remains in the race and manages to secure the presidency, the value of his shares could increase. Conversely, any missteps on the campaign trail could have the opposite effect, further destabilizing the stock.

As the lockup period comes to an end, Trump faces a critical decision that could shape the future of both his personal finances and Truth Social. Whether he chooses to hold onto his shares or cash out, the outcome will likely have significant consequences for the company, its investors, and Trump’s political aspirations.

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Arizona man accused of social media threats to Trump is arrested

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Cochise County, AZ — Law enforcement officials in Arizona have apprehended Ronald Lee Syvrud, a 66-year-old resident of Cochise County, after a manhunt was launched following alleged death threats he made against former President Donald Trump. The threats reportedly surfaced in social media posts over the past two weeks, as Trump visited the US-Mexico border in Cochise County on Thursday.

Syvrud, who hails from Benson, Arizona, located about 50 miles southeast of Tucson, was captured by the Cochise County Sheriff’s Office on Thursday afternoon. The Sheriff’s Office confirmed his arrest, stating, “This subject has been taken into custody without incident.”

In addition to the alleged threats against Trump, Syvrud is wanted for multiple offences, including failure to register as a sex offender. He also faces several warrants in both Wisconsin and Arizona, including charges for driving under the influence and a felony hit-and-run.

The timing of the arrest coincided with Trump’s visit to Cochise County, where he toured the US-Mexico border. During his visit, Trump addressed the ongoing border issues and criticized his political rival, Democratic presidential nominee Kamala Harris, for what he described as lax immigration policies. When asked by reporters about the ongoing manhunt for Syvrud, Trump responded, “No, I have not heard that, but I am not that surprised and the reason is because I want to do things that are very bad for the bad guys.”

This incident marks the latest in a series of threats against political figures during the current election cycle. Just earlier this month, a 66-year-old Virginia man was arrested on suspicion of making death threats against Vice President Kamala Harris and other public officials.

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