"Citigroup-Wells Fargo case moves to NY state court
NEW YORK (Reuters) - A federal judge has transferred Citigroup Inc's (C.N: Quote, Profile, Research, Stock Buzz) $60 billion lawsuit against Wells Fargo & Co (WFC.N: Quote, Profile, Research, Stock Buzz) over the acquisition of Wachovia Corp back to the New York state court where it began, citing a lack of jurisdiction.
In a March 20 ruling, U.S. District Judge Shira Scheindlin agreed with Citigroup that the lawsuit does not raise a federal claim.
She rejected Wells Fargo's argument that the case turns in part on Citigroup's right to relief under a provision governing acquisitions in last year's federal Emergency Economic Stabilization Act. That act authorized the $700 billion bank bailout known as the Troubled Asset Relief Program, or TARP.
Citigroup last September 29 agreed to buy much of Wachovia for $2.16 billion, with the Federal Deposit Insurance Corp sharing in losses on a pool of Wachovia loans.
Wells Fargo trumped that bid four days later with a higher offer for all of Wachovia, and which did not require FDIC support. Citigroup sued to block that merger, but later backed down.
Wells Fargo on December 31 completed the Wachovia acquisition, which was eventually valued at about $12.5 billion.
The case is Citigroup Inc v. Wachovia Corp, U.S. District Court for the Southern District of New York (Manhattan), No. 08-8668. The original case was Citigroup Inc v. Wachovia Corp, New York State Supreme Court (Manhattan), No. 602872/08.
(Reporting by Jonathan Stempel; Editing by Derek Caney)"