November 23, 2008

Lawsuit seeks to block Wachovia deal

Shareholders who oppose Wachovia's purchase have filed a class-action lawsuit to block Wells Fargo's impending purchase of the bank.

A judge in Charlotte, N.C., is to hear the lawsuit Monday. The suit claims Wells Fargo is not offering a fair price for the troubled bank, The Charlotte (N.C.) Observer reported Sunday.

The shareholders want to force Wells Fargo to pay more for Wachovia than what the bank's stock was trading at last year.

Although Wells Fargo needs the approval of Wachovia's shareholders to make the purchase, the ballot is nearly cinched because Wells Fargo controls nearly 40 percent of the Wachovia shareholder vote.

Wachovia is Charlotte's second-largest employer, with 20,000 local workers, the newspaper said.

Local resident John Moore, a shareholder activist who is often critical of management at Wachovia's annual meetings, said he will vote against the deal because of the potential job losses.

It's about protecting people, said Moore, 72, whose family owns about 200,000 shares of the bank.