Wachovia, Citigroup in Federal Court Over Wells Bid
- added October 05, 2008
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- Wachovia (75)
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(Bloomberg) -- Wachovia Corp. asked a federal judge to let a takeover offer from Wells Fargo & Co. proceed and to ignore a state ruling that Citigroup Inc. says makes it the only legal bidder.
The $700 billion federal bailout of the banking industry passed by Congress includes language that permits Wells Fargo to step in, Wachovia's lawyers told U.S. District Court Judge John Koeltl today at an emergency hearing in Manhattan. Citigroup disputed that claim in court filings.
Koeltl said that it ``appears'' Wachovia has the superior argument. He declined to make a ruling on the dispute, giving the parties until Oct. 7 to file briefs on the matter. Lawyers for both sides said they were prepared for a trial in the case.
``This is a matter of considerable urgency,'' David Boies, a lawyer for Wachovia, told Koeltl.
Citigroup, the biggest U.S. bank by assets, is bidding for Wachovia while trying to rebuild after $61 billion of losses tied to the collapse of mortgage markets. The bank wants to buy parts of Wachovia for about $2.16 billion. Wells Fargo is bidding about $15 billion for the whole company. Wachovia said the Wells Fargo bid is a better deal for investors, its workers and taxpayers because, unlike Citigroup, it doesn't rely on U.S. assistance.
State Court
A state judge extended Citigroup's sole right yesterday to negotiate with Charlotte, North Carolina-based Wachovia, the New York-based bank said yesterday in a statement. New York State Supreme Court Justice Charles Ramos issued an emergency order that preserves Citigroup's Sept. 29 ``exclusivity agreement'' with Wachovia ``until further order of the court.''
The accord was set to expire tomorrow. The two banks were scheduled to appear before Ramos on Oct. 10, according to the statement.
The $700 billion federal bailout of the banking industry passed by Congress includes language that permits Wells Fargo to step in, Wachovia's lawyers told U.S. District Court Judge John Koeltl today at an emergency hearing in Manhattan. Citigroup disputed that claim in court filings.
Koeltl said that it ``appears'' Wachovia has the superior argument. He declined to make a ruling on the dispute, giving the parties until Oct. 7 to file briefs on the matter. Lawyers for both sides said they were prepared for a trial in the case.
``This is a matter of considerable urgency,'' David Boies, a lawyer for Wachovia, told Koeltl.
Citigroup, the biggest U.S. bank by assets, is bidding for Wachovia while trying to rebuild after $61 billion of losses tied to the collapse of mortgage markets. The bank wants to buy parts of Wachovia for about $2.16 billion. Wells Fargo is bidding about $15 billion for the whole company. Wachovia said the Wells Fargo bid is a better deal for investors, its workers and taxpayers because, unlike Citigroup, it doesn't rely on U.S. assistance.
State Court
A state judge extended Citigroup's sole right yesterday to negotiate with Charlotte, North Carolina-based Wachovia, the New York-based bank said yesterday in a statement. New York State Supreme Court Justice Charles Ramos issued an emergency order that preserves Citigroup's Sept. 29 ``exclusivity agreement'' with Wachovia ``until further order of the court.''
The accord was set to expire tomorrow. The two banks were scheduled to appear before Ramos on Oct. 10, according to the statement.
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