A Florida judge has denied a motion by Donald Trump's Truth Social to block the sale of 18 million shares by two of the company's co-founders, determining that the company would not suffer irreparable harm and that any potential damage could be addressed through financial compensation. The ruling came from Sarasota County Circuit Judge Hunter Carroll on Friday, who dismissed Truth Social’s arguments for a temporary injunction.

Truth Social 18M Shares Sale : Court Ruling on Temporary Injunction

Truth Social, officially known as Trump Media & Technology Group Corp. (TMTG), sought to prevent Arc Global Investments II LLC and United Atlantic Ventures LLC from selling their shares when a lock-up restriction expires on September 19. However, Judge Carroll ruled that the common stock owned by these entities is not unique and can be compensated with money damages if necessary.

The judge rejected TMTG's request for an evidentiary hearing to demonstrate the potential impact of the share sale on the company’s stock price and viability, stating, "I just cannot come to the conclusion that I'm ever going to get to the point that the damages remedy here is not an adequate remedy at law." He emphasized that the temporary injunction sought by TMTG was not viable.

Arguments and Legal Background

Kevin Jacobs, representing Arc Global, argued that the temporary injunction was akin to an impermissible asset freeze under Florida law. The defense also highlighted that TMTG recently issued 37 million shares to another entity for unrestricted market sale, undermining claims that the company would be significantly harmed by the sale of 18 million shares.

Arc Global and United Atlantic Ventures together hold a significant stake in TMTG, with UAV holding over 10.9 million shares (more than 5%) and Arc Global owning over 7.4 million shares (more than 4%). The shares are set to be sold after the lock-up restriction lifts on September 19.

The legal dispute originates from TMTG’s initial public offering in March following a merger with Digital World Acquisition Corp. (DWAC). TMTG accuses Patrick Orlando, former chair and CEO of DWAC, along with Arc Global, of attempting to block the merger to enrich themselves, resulting in costly delays.

Related Litigation and Ongoing Legal Battles

The lawsuit is one of several interconnected legal battles. TMTG has filed a separate suit, currently paused, against UAV's investors, claiming breach of fiduciary duty. UAV had earlier sued TMTG, alleging that the company schemed to dilute their stake.

At the same hearing, Judge Carroll also denied a motion to stay claims against Patrick Orlando while he appeals the denial of his motion to dismiss based on forum grounds. Orlando had argued that the case should be heard in Delaware, but Judge Carroll maintained that the suit is properly filed in Florida.

Truth Social 18M Shares Sale : Legal Representation and Next Steps

TMTG is represented by Samuel J. Salario Jr., Jason B. Gonzalez, and Raymond F. Treadwell of Lawson Huck Gonzalez PLLC, while Digital World Acquisition Corp. is represented by Bradley J. Bondi of Paul Hastings LLP. Patrick Orlando is represented by Adam L. Schwartz and Andrew T. Figueroa of Vedder Price LLP, with Arc Global represented by Kevin P. Jacobs and Andrew Vitali III of Homer Bonner Jacobs Ortiz PA. United Atlantic Ventures, along with investors Moss and Litinsky, is represented by Christopher J. Clark and Benjamin Dozier of Clark Smith Villazor LLP and Thomas F. Icard Jr. and Tyler J. Brown of Icard Merrill Cullis Timm Furen & Ginsburg PA.

As the case progresses, all eyes will be on the impact of the share sale on Truth Social and the ongoing legal battles surrounding the company's financial maneuvers.