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Citigroup suing pair after deal unravels late
NEW YORK — Citigroup Inc. said Monday it has filed a complaint in New York Supreme Court against Wachovia, Wells Fargo and the directors of both companies seeking more than $60 billion in damages for interfering with the bank’s planned takeover of Wachovia’s banking operations.
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Early last week, Citigroup Inc. agreed to buy Wachovia’s banking assets for $2.1 billion in a deal brokered by the FDIC. In a surprising twist of events, Wells Fargo announced Friday that it agreed to acquire Wachovia in a deal worth $15.1 billion at the time, or $14.8 billion based on Wells Fargo’s closing price Friday of $34.56. Wells Fargo’s deal did not require any government support.
"This was always a deal Citi wanted rather than one we needed,” Citigroup said in a statement Monday. "We were and remain very excited about this transaction and how it will benefit the clients and shareholders of Citi and Wachovia, as well as help preserve the stability of the financial system.”
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The complaint, brought Saturday and filed Monday, seeks more than $20 billion in compensatory damages and more than $40 billion in punitive damages from Wells Fargo & Co. for tortious interference. Citigroup also seeks relief from Wachovia for what it called its bad-faith breach of contract.
"Wachovia continues to believe its agreement with Wells Fargo, which involves no government assistance, is proper and valid,” Wachovia spokeswoman Christy Phillips-Brown said in an e-mail to The Associated Press. "The agreement is in the best interests of shareholders, employees, creditors and retirees, as well as the American taxpayers, and it imposes no risk to the FDIC fund.
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