Ex-DWAC boss from before Trump Media merger suing new chief
What's the story
Patrick Orlando, the ex-CEO of Digital World Acquisition (DWAC), has launched a legal battle against his successor, Eric Swider.
The lawsuit alleges that Swider unlawfully accessed Orlando's files in an attempt to seize control of the publicly traded firm.
This legal action was initiated by Orlando's limited liability company, the Benessere Investment Group, just before DWAC merged with Trump Media & Technology Group last month.
Accusations
Accusations of corporate coup and unlawful access
The lawsuit filed by Orlando accuses Swider and Alexander Cano, DWAC's President and Secretary, of planning a corporate "coup d'etat" to oust him.
It alleges that Swider conspired with Cano, who previously served as Orlando's Assistant at Benessere, to misuse his access privileges.
The suit claims they illicitly obtained confidential files belonging to Orlando in their bid to take over the company.
Unlawful access
Misuse of confidential information alleged
The lawsuit further alleges that Swider and Cano unlawfully accessed Orlando's Mailchimp and DocuSign accounts.
They are accused of using the stolen information, to distribute an email containing misleading statements about Orlando's leadership to ARC II's members.
This action, according to the lawsuit, was part of a strategy designed to remove Orlando from his position as ARC II's managing member.
Board manipulation
Swider's alleged promise of excessive remuneration
The legal complaint also accuses Swider of promising excessive remuneration to other board members, in exchange for their support in ousting Orlando.
After Orlando's removal, Swider took over as DWAC's CEO last July, with Cano being appointed as the company's president.
The lawsuit notes that Cano received a convertible note that could be exchanged for 165,000 shares of DWAC's stock, valued at over $6 million at the time of filing.
Financial struggles
Trump Media's stock performance dips post-merger
Following the merger with DWAC, Trump Media experienced a significant downturn in its stock performance.
The company's shares began to fall after it reported an operational loss of nearly $16 million in 2023.
This financial setback was compounded by an interest expense of $39.4 million, while the company only generated a revenue of $4.1 million during the same period.
Restriction
Legal action initiated by Trump Media co-founders
Andy Litinsky and Wes Moss, co-founders of Donald Trump's social-media start-up, have also initiated legal action against Trump Media & Technology Group.
They allege that the former president punished them by prohibiting the sale of their stocks for six months.
This restriction is reportedly causing "irreparable harm" to both persons, according to their legal complaint.