Judge blocks Wachovia-Wells Fargo merger

NEW YORK, Oct. 5 (UPI) -- Citigroup Inc. says a New York judge has temporarily blocked the planned $15.1 billion sale of U.S. bank Wachovia Corp. to Wells Fargo & Co.

Both Citigroup and Wells Fargo have deals in place to purchase Wachovia, the ailing Charlotte, N.C., retail banking giant. Citigroup had previously announced a $2.2 billion deal to buy Wachovia with the assistance of the Federal Deposit Insurance Corp., CNN reported Sunday.

Citigroup released a statement saying New York State Supreme Court Justice Charles Ramos halted the Wells Fargo deal and demanded lawyers for Citigroup and Wachovia appear before him this week.

An battle may be brewing between Wells Fargo and Citigroup over which will end up obtaining Wachovia. CNN reported the proposed Citigroup-Wachovia purchase agreement contained an exclusivity agreement requiring Wachovia not seek another bidder or provide information or enter talks that might facilitate a rival bid.

Citing unnamed sources, The New York Times reported Citigroup is seeking $60 billion in damages from Wells Fargo for interfering with the initial transaction.

The newspaper said the judge's order could be the opening round in a protracted legal battle between Citigroup and Wells Fargo.