December 6, 2008

Judge rejects Wachovia lawsuit

A North Carolina judge has rejected a lawsuit filed by a Wachovia shareholder seeking to block the bank's sale to Wells Fargo.

The Charlotte (N.C.) Observer reported Saturday that the judge's move all but guarantees the sale will go through.

Judge Albert Diaz of the North Carolina Business Court ruled that Wachovia's directors acted in good faith when they agreed to sell the bank to Wells Fargo.

He also ruled that Wachovia's agreement to give Wells Fargo nearly 40 percent of its shareholder voting power ahead of the shareholder vote is permissible.

The lawsuit was filed in October by New York investor Irving Ehrenhaus, who claimed Wells Fargo had not offered a fair price and was not allowing a fair vote.

Wachovia shareholders are to vote on the Wells Fargo takeover Dec. 23. The deal is to close Dec. 31.