Digital World Acquisition, which has been sued by former CEO Patrick Orlando, said in an 8-K that until the case is adjudicated, it will apply a conversion ratio to all shares of Class B common stock such that Orlando’s ARC Global Investments II would receive the same number of shares of common stock in the post-business combination with ex-president Donald Trump’s media company.
“As such, upon the closing of the Business Combination and pending the Chancery Court’s ruling in, or a resolution by the parties of, the Delaware Lawsuit, the Company intends to issue into a separate escrow account shares of common stock in the post-Business Combination company to satisfy an increase in the conversion ratio with respect to the shares of Class B common stock previously held by the Non-ARC Class B Shareholders,” the filing states.
Shares to be deposited in escrow for the benefit of the Non-ARC Class B Shareholders will reflect the difference between the actual conversion ratio, determined by the Company’s board of directors upon closing of the Business Combination, and a conversion ratio of 2.
Orlando in his lawsuit essentially claims he is owed more money on the deal.
The Delaware Chancery Court last week denied the request of Orlando’s ARC Global Investments II to delay the vote on the business combination and instead to judicially determine the disputed conversion ratio of shares of Class B common stock to shares of Class A.
ARC Global INvestment II is the SPAC’s sponsor. In addition, the Chancery Court requested that the parties agree to establish an escrow account into which disputed shares would be deposited following the Business Combination and held pending the conclusion of the lawsuit.
a vote on the merger with TRump’s company remains scheduled for March 22. Read more.
