Now, though, the legal fireworks have started — and come to a temporary cease fire. Over the past weekend, Citigroup filed a lawsuit (on Saturday, October 4th) in New York State Court. The judge, Judge Charles Ramos, issued an injunction preventing the Wells Fargo-Wachovia merger, and extended the ''exclusivity agreement'' between Citigroup and Wachovia. This was shot down on Sunday by the appeals court.
Currently, hearings are scheduled for Friday. In that lawsuit, Citigroup is seeking $60 billion in damages. $60 billion! This amount is being sought from both Wells Fargo and Wachovia.
Wachovia filed its own lawsuit in New York Federal Court, also on Saturday. It sought an injunction to keep Citigroup's paws off its merger, relying on the new bailout bill, which helps give more protection.
And in North Carolina, Wachovia shareholders filed a suit against Citigroup, also asking for the judge to bar Citi from interfering. The judge there issued that ruling.
And on Monday, October 6th, 2008, the three involved parties (Wachovia, Citigroup, and Wells Fargo) basically agreed to halt litigation until Wednesday at noon. That's Wednesday, October 8th. Why?
The Federal Reserve is sticking its oar in, trying to smooth all the ruffled feathers. The shareholders probably want the Feds to settle it.
But the legal departments of a number of law firms, or at least their profit centers, probably don't. A fight over $60 billion between the heavyweights of the financial world? A mere $500 million or so in legal fees is chump change for that, right?
In any case, this one is moving quite fast.
