A federal judge in Delaware has ruled in favor of a firm seeking assurance that it will be able to sell its minority stake in the parent company of former president Donald Trump’s Truth Social platform
ByRANDALL CHASE AP business writer
September 6, 2024, 7:38 PM
DOVER, Del. — A federal judge in Delaware has ruled in favor of a firm seeking assurance that it will be able to sell its minority stake in the parent company of former president Donald Trump’s Truth Social platform.
The judge on Friday granted summary judgment to Florida-based United Atlantic Ventures LLC in a lawsuit filed against Minnesota-based Odyssey Transfer and Trust Co., a business that handles securities transfers among registered shareholders.
UAV is owned by Andrew Litinsky and Wesley Moss, former contestants on Trump’s TV show, “The Apprentice” who also helped facilitate a merger that took Trump Media public in March.
Since then, UAV and Trump Media have been battling in courts in both Delaware and Florida over UAV’s stake in the company. Attorneys for Trump Media assured a state judge in Delaware earlier this year that UAV was entitled to an 8.6% stake and would suffer no merger-related dilution. They now contend, however, that UAV is not entitled to its shares because of pre-merger mismanagement by Litinsky and Moss.
Friday’s ruling involves UAV’s concerns that it will not receive its Trump Media shares, currently valued at about $350 million, from Odyssey when a post-merger lockup period expires Sept. 19. According to court filings, Odyssey told UAV earlier this year that it would be taking direction from TMTG and its lawyers.
After Odyssey filed a lawsuit, the parties appeared to have reached a resolution, with Odyssey saying it would remove transfer restrictions on the share after the lockup period expires “without preference to any TMTG shareholder.” After seeking approval from Trump Media, however, Odyssey tried to change that language to “on the same basis as other similarly situated TMTG shareholders.”
Trump holds about 115 million TMTG shares, or roughly 60% of the company’s outstanding shares.
U.S. District Judge Gregory Williams questioned Odyssey’s conduct, noting that it claimed the language change was “immaterial,” while allowing it to scuttle settlement negotiations.
“Even outside settlement negotiations, Odyssey’s conduct has been elusive,” Williams wrote.
Williams ordered that when Odyssey is notified by TMTG of the expiration of the lockup provisions, it must promptly notify UAV, remove transfer restrictions on all shares and not interfere with the delivery of the shares.
TMTG’s share price hit a high of $79.38 on its first day of trading but is now hovering around $17, closing Friday at $17.10.
