Digital World Acquisition, the SPAC planning to take Trump Media & Technology Group public, sued yesterday to force its biggest investor, ARC Global Investments II, to vote in favor of the deal before a critical deadline this week.
The suit, filed in New York state court, is the latest legal battle between Digital World and its former CEO, Patrick Orlando. While he was ousted last year, Orlando still holds significant leverage over the company through his ability to influence the voting shares of ARC under his control.
With the merger vote March 22, Digital World insists that ARC has to vote in favor of the deal pursuant to a 2021 agreement, at the time of the SPAC’s initial public offering, Bloomberg reports. If the Digital World takeover of Trump Media proceeds, it could provide a windfall of as much as $4 billion to Donald Trump as he faces hundreds of millions of dollars in legal verdicts. Although Trump holds a majority stake in his media company, his shares are subject to a six-month lockup.
“ARC must vote in favor of the merger pursuant to the unambiguous terms of the letter agreement,” DWAC said in the suit. “There are no exceptions despite ARC’s managing member Patrick Orlando’s desire to hold ARC’s vote hostage for his personal gain.”
Orlando, who still sits on DWAC’s board, has challenged how much stock ARC shareholders would receive in Trump Media & Technology Group. He didn’t return messages seeking comment on the lawsuit.
Digital World and Trump Media have also sued Orlando in Florida over the deal. Read more.
