The executives behind a blank-check company that plans to take Donald Trump’s media business public have failed to pay their proxy solicitors, even though they support expansion to complete the deal. Struggling to collect.
According to people familiar with the situation, Digital World Acquisition Corporation, a special purpose acquisition company founded by Patrick Orlando, has not paid Saratoga Proxy Consulting for its work helping to rally shareholders.
One of the people said DWAC owed the New York-based firm six digits, but Orlando has informed him that there is no money to pay the bill. On Friday, the company announced that it has brought in a new proxy solicitor, Alliance Advisors.
Orlando responded to an email sent by the Financial Times on September 13 with a screenshot to show a message sent by TD Ameritrade to a DWAC shareholder that the voting had closed a week earlier and securities There was a link to its latest filing with the End Exchange Commission. Saratoga declined to comment.
DWAC’s failure to pay its proxy solicitors could raise questions about the finances of its backers, including Orlando, who stand to make hundreds of millions of dollars when the deal is completed. If the transaction fails, investors will receive $10 per share, but the sponsors will lose the money put forward to establish the company.
In May, the DWAC warned investors that Trump was at risk due to his history of business bankruptcies and said that “there can be no assurance that TMTG will also not go bankrupt”.
The blank-check conglomerate hired Saratoga in August as it sought approval from shareholders for a one-year extension to complete its deal with Trump Media & Technology Group, which the federal government says. It has been slowed down because of an investigation by prosecutors.
It agreed to pay the firm a $25,000 fee and expenses, which would normally include assisting call centers and mailing voting cards to shareholders.
Despite an aggressive campaign by Orlando to reach DWAC’s base of retail investors, just over 40 percent have voted in favor of the expansion as of this week, according to a source familiar with the count. The company requires 65 percent of shareholders to extend the deadline at its meeting on October 10.
Retail investors are extremely difficult to reach and companies can often spend millions of dollars seeking their votes. Orlando has stated in several public interviews that DWAC has a much higher percentage of retail shareholders than most Spaxes.
Spac initially had until 8 September to secure shareholder approval for the extension, but its sponsor bought more time on 8 December by paying $2.9mn for a three-month extension.
If successful, the transaction will result in a public listing for TMTG and generate more than $1bn in revenue to advance its agenda of “cancellation culture” and “stand up to big tech”. There have also been reports – which the former president has vigorously denied of financial trouble in Trump’s media venture – on his social media platforms.