Rivals Agree to Pause in Wachovia Fight

Citigroup (C Quote), Wells Fargo (WFC Quote) and Wachovia (WB Quote) have agreed to halt their burgeoning legal battle through Wednesday, as they work with the Federal Reserve to resolve the disagreements resulting from two competing deals for the ailing North Carolina bank last week.

Wachovia would have failed last week if Citi hadn't heeded the federal government's call to purchase its banking operations for $2.16 billion the day before, Citi said in announcing a $60 billion lawsuit against Wachovia and Wells Fargo for breaching an exclusivity agreement by trumping its deal. Citi said Wells Fargo "walked away" from a deal before federal authorities called on Citi to help.

The banks have now agreed to put all formal litigation on temporary hold, according to statements by all three firms. The "standstill agreement" will expire at noon on Wednesday. ...