A federal judge in Delaware has ruled in favor of United Atlantic Ventures LLC (UAV), a firm seeking the right to sell its minority stake in Trump Media & Technology Group (TMTG), the parent company of former president Donald Trump’s social media platform, Truth Social.
Court Ruling on Share Transfer Dispute
In a decision on Friday, U.S. District Judge Gregory Williams granted summary judgment to UAV in its lawsuit against Minnesota-based Odyssey Transfer and Trust Co., a company that handles securities transfers for registered shareholders. UAV, based in Florida, filed the lawsuit over concerns that Odyssey would block the transfer of its shares when a post-merger lockup period expires on September 19.
Background of the Dispute
UAV, owned by Andrew Litinsky and Wesley Moss, both former contestants on Trump’s reality TV show “The Apprentice,” facilitated the merger that took TMTG public in March. The stake in question is currently valued at approximately $350 million.
Since the merger, UAV and TMTG have been engaged in legal battles in both Delaware and Florida. TMTG initially assured a state judge in Delaware that UAV was entitled to an 8.6% stake in the company. However, Trump Media later argued that UAV should not receive its shares due to pre-merger mismanagement by Litinsky and Moss.
Odyssey’s Conduct in Question
According to court documents, Odyssey initially agreed to remove restrictions on the transfer of UAV’s shares after the lockup period. However, Odyssey later attempted to alter the language in their agreement, stating that UAV’s shares would be released “on the same basis as other similarly situated TMTG shareholders.” This language change led to a breakdown in settlement negotiations.
Judge Williams criticized Odyssey’s actions, labeling its conduct as “elusive” and raising concerns over its handling of the negotiations.
Judge’s Orders on Share Transfer
Judge Williams ruled that Odyssey must promptly notify UAV of the expiration of the lockup provisions and remove all transfer restrictions on UAV’s shares without interference. The ruling ensures that UAV can sell its minority stake once the lockup period ends.
TMTG’s Fluctuating Share Value
TMTG’s share price has significantly dropped since its initial public offering. After hitting a high of $79.38 on the first day of trading, the stock is now hovering around $17, closing at $17.10 on Friday. Trump holds about 60% of the company’s outstanding shares, equating to roughly 115 million shares.
This ruling could have broader implications for TMTG shareholders as the lockup period expiration approaches.
