A judge rejected Citigroup Inc.'s argument that Wachovia Corp. was bound by an exclusivity agreement last October and couldn't accept a competing acquisition offer from rival Wells Fargo Corp.
In an order dated Monday and made public Wednesday, U.S. District Judge Shira Scheindlin in Manhattan found that a section of the Emergency Economic Stabilization Act rendered the exclusivity agreement between Citigroup and Wachovia unenforcable.
"Congress clearly meant to exempt subsequent bidders or acquirers from penalties for interfering with a transaction that is protected by an agreement such as the exclusivity agreement at issue here," the judge said.
"Because Wells Fargo acquired all of Wachovia, imposing liability on Wachovia would be equivalent to penalizing Wells Fargo."
