(CN) – A Wachovia shareholder seeking to halt the bank’s merger with Wells Fargo is entitled to a speedy resolution of his injunction request, the North Carolina Business Court ruled.
Irving Ehrenhaus brought a class action against the banks, alleging a breach of fiduciary duty by Wells Fargo.
Wachovia chose Wells Fargo as a merger over Citigroup before the Federal Deposit Insurance Corp. could put Wachovia into receivership.
Ehrenhaus claimed that the stock-for-stock offer was too low: .2 shares of Wells Fargo stock per share of Wachovia stock. This set the value of Wachovia stock at about $7 per share, or $3 below the market price, Ehrenhaus claimed. He also complained that the deal included “golden parachutes” for Wachovia executives.
Judge Diaz ruled in the shareholders’ favor on their request for expedited judgment because of their “colorable claim that the Share Exchange transferring a nearly 40 percent voting bloc to Wells Fargo in advance of a vote on the merger agreement is unduly coercive.”
However, Diaz denied the shareholders’ request for expedited discovery.
“Plaintiff has not specified the discovery he wishes to take, nor has he served discovery on any defendant.”