Poinbank:Trump Media sues former "Apprentice" contestants and Truth Social co-founders to strip them of shares

Former President Donald Trump's media business is Poinbanksuing two of its co-founders, who were also contestants on Trump's reality show "The Apprentice," alleging that they mismanaged the business and should be stripped of their shares in the newly public company.

The lawsuit was filed March 24 in Florida state court, just one day before Trump Media & Technology Group debuted on the Nasdaq stock market. Trump Media, whose main asset is the fledgling social media platform Truth Social, soared in its first two days of trading and currently has a valuation of about $6.8 billion. 

The Trump Media & Technology Group lawsuit alleges that co-founders, Andy Litinsky and Wes Moss, "failed spectacularly" at setting up the business and creating an effective corporate governance structure. As part of their initial deal with Trump, the co-founders had received 8.6 million shares of Trump Media, currently valued at $432 million, which the lawsuit is seeking to claw back. 

The lawsuit also blames Litinsky and Moss for Truth Social's rocky debut, claiming that they hired a "deficient" team to manage the social media platform's development and created a "toxic corporate culture."

"The Truth Social launch did not go smoothly, leading a hostile press to criticize the company for long user wait times and technical failings, to the detriment of the company's business reputation," the lawsuit claims.

Litinsky and Moss' attorney, Christopher J. Clark, declined to comment on the lawsuit. 

Trump Media's filing follows a complaint filed in February in the Delaware Court of Chancery by Litinsky and Moss that seeks to prevent the former president from taking steps the two said would sharply reduce their combined 8.6% stake in Trump Media. 

Trump, meanwhile, owns about 57% of Trump Media, a stake that is valued at about $4 billion — at least on paper — based on today's stock price. Trump and other top shareholders are currently under a "lock up" provision that bars them from selling shares for at least six months. 

—With reporting by the Associated Press.

In:
• Donald Trump

Aimee Picchi

Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.

Twitter