Wall St woes: Watching Wachovia
9 October 2008
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25 November 2013
14 October 2013
It was literally a last-minute intervention. At 11.59am yesterday (8 October), the Federal Reserve extended its standstill on Citigroup's lawsuit over Wells Fargo's bid for US bank Wachovia.
Wachovia's lawyers at Boies Schiller & Flexner, Citigroup's litigators at Gregory Joseph Law Offices and Wells Fargo's lawyers at Wachtell Lipton Rosen & Katz were all ready to move onto the next stage. Then in the final 60 seconds of the ban they learned that the standstill will last at least until this Friday (10 October).
"They waited until the very last minute," said an inside source. "People were ready to run to the court room and push the button at 11.59am. But they had to extend it because nothing had been worked out."
Citigroup, which had agreed a takeover of Wachovia before Wells Fargo stepped in, filed its law suit last weekend, claiming Wachovia had breached an exclusivity agreement by accepting Wells Fargo's much higher $15bn bid. Since then, the two financial institutions have been banned from proceeding with any litigation relating to the fate of Wachovia.
"Any litigation is highly disruptive in the current climate," added the source. "It prevents a solution being reached."
While Friday is tipped to be the day the ban will be lifted, it is highly likely the battle for Wachovia will not be solved by the end of the working week.
"It would not be a surprise to see this continue over the weekend," the mole commented.
PS: The loan market turmoil has parties scrambling to re-read the boilerplate, says the LSTA's Bridget Marsh
Latest credit crisis news
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- 29-Sep-2008 Davis Polk, Skadden, Sullivan in Citi's Wachovia buy
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- 24-Sep-2008 Sullivan and Munger Tolles step up for Buffett Goldman deal
- 24-Sep-2008 Simmons scores first Lehman hedge fund claim
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