Donald Trump‘s blank-check merger has landed in front of the Delaware judge who oversaw the unruly litigation challenging
The case in Delaware Chancery Court will be handled going forward by Vice Chancellor Morgan T. Zurn, according to Vice Chancellor Sam Glasscock III, who previously agreed to fast-track the dispute. Glasscock, who is retiring, made the announcement at a court hearing Tuesday.
The lawsuit is one of four filed this year over the tie-up between Truth Social, Trump’s right-wing social media platform, and a publicly traded shell entity known as a special purpose acquisition company. That’s in addition to an insider trading case in federal court in Manhattan against an architect of the transaction and two investors.
The deal closed in March after Glasscock declined to issue an injunction blocking it while litigation plays out. Trump Media & Technology Group Corp., the holding company for Truth Social, surged in the days after the merger, driven by retail traders. But its shares have plunged about 44% since March 27, wiping out billions in value. The former president owns roughly 58% of the business.
Read More: Trump Media Spirals as 36% Dive from Debut Erases Billions
Zurn is one of seven trial judges on the country’s leading M&A court, a forum that typically handles heavyweight buyout battles and shareholder cases blaming boards of directors for major corporate scandals. But the meme stock traders who have disrupted financial markets in recent years have also begun trickling into court, as she knows perhaps better than anyone.
Her initial decision rejecting a shareholder settlement in the AMC case last summer—after a retail investor objected to the company’s deal with a pension fund—stunned the market, sending arbitragers scrambling to unwind their bets in favor of the complex transaction. The judge later signed off on a revised version of the accord, giving the company permission to convert its AMC Preferred Equity units, or APEs, into common stock.
Nearly 3,000 investors wrote to Zurn to oppose the pact, many of them self-proclaimed “apes"—meme stock traders—who cited market manipulation theories that had spread online. The judge ended up deputizing a corporate attorney not otherwise involved with the case to sort through the tidal wave of correspondence.
Read More: AMC APE ‘Catastrophe’ in Crosshairs as Settlement Appeal Begins
More recently, the court’s chief judge, Chancellor Kathaleen St. J. McCormick, said she has received “many communications” from investors in
The Truth Social suit heading to Zurn’s docket says the former president is wrongfully diluting the 8.6% stake owned by two former contestants on The Apprentice who co-founded Trump Media. Trump has countersued them in Florida state court, seeking to cancel their shares. He’s represented in Delaware by one of the same attorneys who spearheaded the effort by a retail investor to derail the AMC settlement.
Before stepping back from the case Tuesday, Glasscock agreed to let the co-founders—suing through an investment vehicle—update their claims against Trump. The new complaint, still under court seal, says Trump violated a court order and breached his fiduciary duties by imposing a “retaliatory” stock lockup on them and bringing the Florida case, according to Glasscock’s description of the allegations.
Trump is represented in Delaware by Halloran Farkas & Kittila LLP. The co-founders are represented by Berger McDermott LLP and Clark Smith Villazor LLP.
The case is United Atl. Ventures LLC v. Trump Media & Tech. Grp. Corp., Del. Ch., No. 2024-0184, 4/9/24.
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