Citi Sues Wells Fargo, Wachovia for $60 Billion

Updated from 12:40 p.m. EDT

Citigroup (C Quote) said Wachovia (WB Quote) would have failed last Tuesday if Citi had not heeded the federal government's request to step in and buy much of the ailing bank.

The New York bank made the claim Monday in a statement announcing it had filed a $60 billion lawsuit against Wachovia and Wells Fargo (WFC Quote) for breaching an exclusivity agreement by trumping its $2.16 billion deal struck Monday with a $15.1 billion agreement reached Friday. Citi said Wells Fargo "walked away" from a deal before federal authorities called on Citi to help.

Citi's purchase was contingent on help from the Federal Deposit Insurance Corp. Citi was assuming responsibility for up to $42 billion of losses on $312 billion of Wachovia loans identified as potentially troubling. The FDIC would backstop the rest. Citi also was not buying Wachovia's securities and asset management units. Wells Fargo's offer was for the full company and included no help from the federal government. ...