Dismissal Of North Carolina Lawsuit Involving Wachovia-Citigroup-Wells Fargo Merger Issues

The North Carolina litigation involving Citigroup and Wells Fargo's fight for Wachovia has been dismissed with the consent of the parties.  As a part of the dismissal, Citigroup has agreed that it will not take any steps to enjoin a merger between Wells Fargo and Wachovia or interfere with a vote of the Wachovia shareholders on that merger.

Bud Baker, Wachovia's former CEO, had obtained a Temporary Restraining Order in Mecklenburg County which prohibited Citigroup from "filing or continuing any legal action against Wachovia or Wells Fargo to enforce the terms of the second paragraph of the Letter Agreement." 

The referenced second paragraph of the Agreement gave Citigroup a period of exclusivity to pursue the negotiation of a definitive agreement with Wachovia.  Citigroup claimed in litigation in New York that this provision had been breached by Wachovia with the assistance of Wells Fargo, and it had obtained a limited injunction from a Judge there.

The Joint Stipulation of Dismissal of the North Carolina action contains a commitment by Citigroup that it will not seek to prevent a shareholder vote on a Wells Fargo-Wachovia Merger.  It says:

Without waiving its rights fully to pursue monetary damages in other litigation, that Citigroup will not pursue any form of injunctive relief to seek to prevent a shareholder vote on the merger between Wachovia Corporation and Wells Fargo & Company, Inc. or pursue any kind of injunctive relief that would prevent the consummation of that merger.

Citigroup stated in a Press Release its intention to pursue damage claims against Wachovia and Wells Fargo.  It says that its "shareholders have been unjustly and illegally deprived of the opportunity the transaction created."

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