Timeout Called In Wachovia Takeover Battle
Professor Joseph A. Grundfest is quoted in a Los Angeles Times article about the contentious battle between Citigroup and Wells Fargo to takeover Wachovia:
Citigroup's contention is a solid one, said Joe Grundfest, a securities law professor at Stanford University who has followed the case closely.
Grundfest said the exclusionary agreement was so sweeping that it precluded Wachovia not only from discussing another offer but also from accepting one that was made.
What's more, Grundfest said, undoing the Citigroup deal would undermine the authority of the FDIC just as the bank-insurance and regulatory agency is preparing to deal with the expected failure of many additional banks.
"When you think you have a deal with the FDIC, do you really have a deal? The FDIC needs to do these banking transactions with speed and certainty," Grundfest said. "Litigation leads to delay and risk. And that's not in the FDIC's best interest."