Tsk tsk, Wells Fargo. You should’ve known that stealing Citibank’s unspoiled bride at the alter was going to draw a bitter legal challenge. Late last night, Citibank’s team of repo-lawyers claimed a partial victory, announcing that a New York judge has agreed to block Wachovia’s sale. Citibank is also demanding $60 billion from Wells Fargo for interfering with the deal.
UPDATE: Now the block has been blocked! Madness continues apace.
Citibank previously teamed up with the FDIC to pick off Wachovia’s banking operation for $2.2 billion. Four days after the deal was announced, Wells Fargo loaded up the stagecoach, buying Wachovia as a whole for $15 billion. The FDIC shrugged its shoulders, glad not to have pay $42 billion to secure against losses, and let Wells Fargo proceed with the takeover.
Citigroup raised the stakes in the merger battle on Saturday afternoon, asking Justice Charles E. Ramos of New York State Supreme Court to issue an emergency order blocking the deal between Wachovia and Wells Fargo.
Representatives from the banks met at Justice Ramos’s home in Cornwall, Conn., late Saturday afternoon for more than three hours of oral arguments, according to people briefed on the situation.
In the unusual weekend session, Citigroup presented Justice Ramos with a 16-page complaint naming both Wells Fargo and Wachovia, and their boards, as defendants. But it has not yet filed the suit formally because the courts were closed.
Late Saturday, after several hours of intense legal jockeying, Justice Ramos issued an injunction effectively blocking the Wells Fargo deal, pending a hearing scheduled for Friday.
Wachovia hasn’t seen the judge’s order yet, but that didn’t stop them from debasing Citibank’s lawsuit as nothing more than a “pointless legal maneuver.”
Wachovia customers can sit back and feel loved. Your accounts are safe, and for the moment, your banking experience will remain the same as it ever was.
Citigroup Says Judge Suspends Wachovia Deal [The New York Times]
Citi: Wells Fargo blocked from buying Wachovia [AP]
PREVIOUSLY: Giddyup! Wells Fargo Rides In And Steals Wachovia From Citibank!
(Photo: So Cal Metro)