NEW YORK — Wells Fargo Corp. filed its own lawsuit Tuesday against Citigroup Inc. in an ongoing legal tussle over Wachovia Corp.
In a lawsuit filed in U.S. District Court in Manhattan, Wells Fargo asked a federal court to block Citigroup from pursuing liability claims against Wells Fargo after Wachovia chose to accept a competing acquisition offer from Wells Fargo.
On Oct. 3, Wells Fargo announced it had reached an agreement to acquire all of Wachovia in a $15 billion deal, days after the federal government helped negotiate an agreement in principle in which Citigroup would acquire the Charlotte, N.C., company's banking business for about $2.1 billion.
Wells Fargo also asked the court Tuesday to declare unenforceable a provision of the Citi-Wachovia agreement that would have prevented Wachovia from considering, and entering into, other merger offers.
The San Francisco company said the letter agreement between Citi and Wachovia is unenforceable under the recently passed bailout package (formally known as the Emergency Economic Stabilization Act of 2008) because it is "contrary to public policy."
Last Thursday, Citigroup dropped its efforts to block the Wells Fargo-Wachovia tie up, but said it would still pursue claims of breach-of-contract and tortious interference against Wells Fargo, Wachovia and their directors.
Citigroup, which initially filed its claims in New York State Supreme Court in Manhattan, is seeking $60 billion in damages. The banks are still tussling over whether the suit should be heard in state court or federal court.
When asked about Wells Fargo's lawsuit, a Citigroup spokeswoman referred a reporter to the company's prior court filings.
In court filings, Citigroup has said an "exclusivity agreement" signed by Wachovia when it agreed to sell its banking business to Citigroup restricted Wachovia from entering into merger discussions with any other bank.
"The exclusivity agreement recognizes that a breach of the agreement, like that at issue here, would cause irreparable injury and that the non-breaching party 'could not be made whole by monetary damages'."
Meanwhile, Citigroup on Tuesday asked U.S. District Judge Lewis A. Kaplan in Manhattan for a jury trial in a separate case brought by Wachovia.