Wachovia Corp. said Wednesday that it has settled a lawsuit filed by shareholder Irving Ehrenhaus that aimed to block Wachovia's sale to Wells Fargo & Co. or force Wachovia to renegotiate for a higher price.
In disclosing the settlement, Wachovia also disclosed some particulars about its demise.
In a five-day period covering the end of September and the beginning of October, Wachovia said it hastily pieced together a deal with Wells to avoid a government takeover, at times skipping over normally routine steps to get details of the sale finalized, the Charlotte company said in a regulatory filing.
It also said its financial adviser, Goldman Sachs Group Inc., "did not perform certain analyses that it customarily would have prepared for Wachovia in connection with a fairness opinion" because they were "not meaningful as a result of the extraordinary circumstances facing Wachovia."
The suit, filed in North Carolina Business Court in Charlotte, said Wachovia's board rushed into the deal and agreed to an unfair price. It also challenged the legality of Wachovia's giving Wells 39.9% shareholder voting power, a provision Wells sought to bolster the odds shareholders would approve the deal when they vote Dec. 23.
On Dec. 5 Judge Albert Diaz denied the shareholder's request to block the deal and ruled that the voting-power provision did not preclude other shareholders from blocking it.
