Citi has filed a complaint against Wachovia Corp., Wells Fargo & Co. and the directors of both companies.
In the complaint, filed with the Supreme Court of the State of New York, Citi is seeking more than $20 billion in compensatory damages and more than $40 billion in punitive damages from Wells Fargo for what Citi calls tortious interference with Citi's contract with Wachovia. Citi is seeking relief from Wachovia for its alleged bad faith breach of that contract.
‘Seven days ago, in the hours before the markets opened, Citi agreed to the government's request to assist with a rescue of Wachovia after Wells Fargo walked away from Wachovia,’ the company says in a statement accompanying the filing. ‘This was always a deal Citi wanted rather than one we needed. 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.’
‘The Citi/Wachovia transaction would have been signed and announced on Friday, October 3, if it had not been subverted by the unlawful conduct of Wachovia, Wells Fargo, and their officers and directors and outside advisors,’ Citi adds.
Citi, Wachovia and Wells Fargo have subsequently declared a two-day truce in an effort to settle the matter without a prolonged legal battle. Federal Reserve officials currently in discussion with the three companies urged the firms to pause and consider a compromise, the Wall Street Journal reports.
Sources: Citi, Wall Street Journal