$Digital World Acquisition Corp(DWAC)$ 

Court declined to expedite a suit brought by DWAC's former head that seeks to block the deal

Digital World Acquisition Corp., the special-purpose acquisition corporation that's seeking to merge with Trump Media and Technology Group, former President Donald Trump's social-media company, said a Delaware court issued a ruling late Wednesday that will allow it to push ahead with a vote on the deal on March 22.

In a regulatory filing, DWAC (DWAC) said the Delaware Chancery Court denied a request from its former chairman and chief executive Patrick Orlando to expedite his lawsuit against the company, which seeks to block the deal unless he is awarded a larger number of shares than DWAC is currently proposing.

Orlando's ARC investment vehicle has said it should receive 1.78 Class A shares for each class B share owned, while DWAC has said the ratio was 1.34. The difference between the two is equal to more than 2.5 million shares, DWAC said in a recent regulatory filing.

After oral arguments at a hearing on Tuesday, the court declined to expedite the case schedule, allowing the March 22 vote to proceed.

The court ruled that DWAC's proposal to place the disputed shares into an escrow account once the deal closes "was sufficient to preclude a possibility of irreparable harm related to the conversion of ARC's shares," said the filing.

The court further ruled that ARC and DWAC confer and propose a schedule by March 8 under which the court may resolve the action within 150 days of the merger closing.

"A lot of work remains in front of us, but the court's denial of an injunction prior to the merger vote was critically important as we proceed towards our vote on March 22," said Eric Swider, DWAC's chief executive, in the filing.

The March 22 vote will decide whether the blank-check company can merge with TMTG, a deal that could create a company worth billions of dollars and offer Trump a windfall, at a time when he owes more than $500 million in civil judgments in New York.

DWAC's stock was up 4.5% Thursday and has gained 127% in the year to date.

DWAC launched merger talks with TMTG, which operates the conservative Truth Social platform, in October of 2021, but has struggled to consummate the deal amid regulatory pushback and challenges from the U.S. Justice Department.

Also read: Trump's Truth Social merger partner settles fraud charges with SEC over misleading investors

Further obstacles to the deal closing include a separate lawsuit brought by TMTG's co-founders, Andy Litinsky and Wes Moss, whose investment company, United Atlantic Ventures, is also seeking to block the deal. Litinsky and Moss were both contestants on Trump's "The Apprentice" reality TV show.

UAV accused Trump in a recent lawsuit of trying to dilute the value of shares in TMTG held by Litinsky and Moss that could cost them millions of dollars in profit. The suit alleges that UAV's current 8.6% stake in TMTG would be diluted to less than 1% if the TMTG board approves an eight-fold increase in the number of authorized shares, increasing them to 1 billion from 120 million.

"The only plausible reason for TMTG to authorize this massive new block of stock and create non-voting stock is so Trump can dilute UAV and take the lion's share of merger consideration for himself," the motion says.

UAV also recently sent letters to DWAC asserting that an early agreement with Trump from 2021 is still in effect and gives them the right to appoint two directors to the board.

Meanwhile, Trump, who is poised to become the Republican party's nominee for the November presidential election, is still facing four criminal cases in which he faces 91 counts, a civil complaint and a subsequent defamation case in which a jury found him liable for sexual abuse, and a $355 million fraud verdict against his businesses, as the Associated Press reported.

The DWAC's prospectus for the merger runs to nearly 600 pages and the risk factors outline all of the companies associated with Trump that have gone bankrupt.

"There can be no assurances that TMTG will not also fail," it says.