Connecticut officials are asking federal regulators to block the proposed $1.5 billion sale of NewAlliance Bancshares Inc. in New Haven to First Niagara Financial Group.
New Haven Mayor John DeStefano and senator-elect Richard Blumenthal, the state's attorney general, will hold a press conference this afternoon in front of NewAlliance's headquarters to denounce the planned acquisition.
An attorney for the city said it has also moved to intervene in a lawsuit filed by NewAlliance shareholders asking a judge to block the sale. The lawsuit claims that NewAlliance and its board violated their fiduciary duty by conspiring to sell the company to enrich themselves.
"We think that given the city's interest in the potential loss of capital and loss of jobs that the city should be heard," said Robert Solomon, the supervising attorney at the Yale Law Clinic, which is representing New Haven.
Solomon said the city has also asked for a formal hearing on the proposed acquisition, and has sent letters to the Federal Reserve Board, the Office of the Comptroller of the Currency and the state banking department asking the regulators to reject the merger application.
Blumenthal announced in September that he was investigating the proposed sale. He sent a letter to the banks asking them to provide him with information on and justification for the deal, saying it "raises significant and far-reaching legal and public policy issues."
The $16.3 million severance package for Peyton Patterson, NewAlliance's chief executive, has also drawn significant criticism from city officials..
A First Niagara spokeswoman said the company would issue a statement after the press conference.
