Wells Fargo, Citigroup Reach $100M Settlement
After more than two years of litigation, Wells Fargo & Company and Citigroup announced Friday that the companies have reached a $100 million settlement in regards to Wells Fargo's purchase of Wachovia Corporation.
The dispute started two years ago when Wells Fargo announced that it would pay about $12.7 billion for Wachovia Corporation, just four days after it had appeared that Citigroup would pay $2.2 billion for portions of the bank.
The move stunned the financial world and the Federal Deposit Insurance Corporation, which had already given its blessing to Citigroup and assured the company that the government would pick up any losses from bad Wachovia loans, which totaled more than $42 billion.
A few days after Wells Fargo announced its acquisition of Wachovia-which was completed in January 2009-Citigroup filed a suit in New York State Supreme Court in Manhattan claiming Wells Fargo interfered with the company's offer and that the deal was a breach of contract.
Citigroup was seeking $60 billion in total damages-$20 billion in compensatory damages and $40 billion in punitive damages. The $100 million settlement will resolve all claims in relation to the Wachovia acquisition, according to a press statement.
“We are glad to put this matter behind us and we look forward to our two institutions working together constructively in the future,” both companies said in a statement.
Wells Fargo, which is based in San Francisco, employs about 20,000 people within Minnesota, making it Minnesota's ninth-largest employer.