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Wells Fargo, Wachovia Sued for $60 Billion by Citigroup


Wells Fargo and Wachovia face a $60 billion lawsuit launched by Citigroup, after the tentative deal Citigroup was working on to purchase Wachovia's banking operations was usurped by a rival offer from Wells Fargo & Co.

Filed Monday in New York Supreme Court, the complaint seeks more than $40 billion in punitive damages and more than $20 billion in compensatory damages from San Francisco-based Wells Fargo & Co, for tortious interference. Citigroup is also suing Wachovia for an alleged bad-faith breach of the banks' contract.

In a deal brokered last week by the FDIC, Citigroup had agreed to buy Wachovia's banking assets for $2.1 billion. However,on Friday Wells Fargo announced that it would acquire Wachovia for $15.1 billion at the time, or $14.8 billion based on Wells Fargo's closing price Friday. The Citigroup deal was government backed, but the Wells Fargo's deal was not. According to documents filed in federal court on Sunday, Wachovia had agreed to the deal with Citigroup "with the understanding that a seizure of its banking assets later that day by the Federal Deposit Insurance Corp. would occur" unless it accepted Citigroup's proposal.

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Published on Oct-6-08


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