Judge hears arguments in challenge to Wachovia-Wells Fargo deal
In negotiations between Wells Fargo and Wachovia, the companies traded a small number of stocks with each other. As a result, Wells Fargo received 40 percent of voting shares, which gives it a significant voice in next month's vote. If Judge Albert Diaz decides to block the vote, Wells Fargo could potentially walk away from the deal. But if Diaz lets it take place, Attorney Chet Waldman says this would open the floodgates to companies making such deals. "It would say let's stack the deck so impermissibly that it's just an outrage. And he can't let this stand because if he lets it go here, it's going happen in every other merger. Shareholders' rights to vote are out the window," he says. Waldman's law firm is representing a shareholder named Irving Ehrenhaus. His attorneys say he holds 1,080 shares. They say other shareholders and North Carolina State Treasurer Richard Moore learned of the lawsuit and inundated the court with letters supporting Ehrenhaus' position. Waldman makes it clear that he is only advocating for Wachovia shareholders' rights. "Of course we're not taking a position at this point - it's a good deal or it's a bad deal- we're simply saying shareholders should have the right to decide. It should be their vote," says Waldman. But during the hearing Wells Fargo attorney Thomas Cottingham argued that shareholders seeking the injunction are looking for a right to vote against the merger. Wachovia attorney Robert Fuller argued the plaintiffs, whom he said have few shares, are playing with the future of Wachovia, its shareholders and employees. The banks' attorneys did not speak with reporters but a Wachovia spokeswoman said they stand by the deal they call good for the company, shareholders, employees and the community. Judge Diaz gave no indication of when he'd rule. He is expected to make a decision before December 23rd. That's when Wachovia shareholders are scheduled to vote on the acquisition.