It looks like Citigroup, Wachovia and Wells Fargo have declared a time out until Wednesday. In consultation with the Federal Reserve, the three companies have agreed to a standstill on all formal litigation, according to a press release from Citi today. This means that the state court case—which has already seen one judge enjoin Wells from acquiring Wachovia and another overturn that decision—and the federal case—which was to be argued tomorrow—will all be halted as negotiations to divide the company between Citi and Wells continue.
We can’t help but wonder if maybe…just maybe…Robert Steel’s going to go out and cut another deal behind everyone’s back. That guy doesn’t like to be told what to do. And now we all know that these kind of standstill agreements are unenforceable under the bailout law.
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