"Wachovia engaged Perella Weinberg" under Robert K. Steel

Mr. Steel and representatives of Perella Weinberg, Wachovia’s advisors, had two additional follow-up conversations with Mr. Kovacevich to make arrangements for due diligence work and encourage him to consider the opportunity on an accelerated basis. 

After extensive questions, discussion and consideration by the board of directors, on motion duly made and seconded, the Wachovia board resolved unanimously that the Wells Fargo merger agreement and the merger are advisable for, fair to and in the best interest of Wachovia shareholders and voted unanimously to approve and adopt the merger agreement and the merger and recommend that Wachovia shareholders approve the plan of merger contained in the merger agreement, subject to receipt of the fairness opinions from Perella Weinberg and Goldman Sachs. Early in the morning on October 3, Perella Weinberg and Goldman Sachs orally delivered their opinions that, as of that date, and based upon and subject to the factors, limitations and assumptions to be set forth in their respective written opinions, as well as the extraordinary circumstances facing Wachovia to be described therein, the exchange ratio pursuant to the Wells Fargo merger agreement was fair, from a financial point of view, to the holders of Wachovia common stock (other than Wells Fargo and its affiliates). The opinions of Goldman Sachs and Perella Weinberg were subsequently confirmed in writing.


http://www.calculatedriskblog.com/2008/11/wells-fargo-and-wachovia-background-of.html

http://www.calculatedriskblog.com/2008/10/irs-tax-change-helps-wells-fargo.html

During its scramble for a merger partner, Wachovia hired Perella Weinberg, along with Goldman Sachs, to advise it on potential deals. Each firm received a fee of $25 million for its services, according to a securities filing.

During his time at Goldman Sachs, Steel also worked with Perella Weinberg co-founder Peter Weinberg.

“All of us at Perella Weinberg Partners will benefit from (Steel’s) skills, energy and counsel in the years ahead,” Perella said in a statement.

http://www.charlotteobserver.com/2014/05/28/4937745/former-wachovia-ceo-bob-steel.html#.U4_cEfldWnY

On December 5, 2008, the Court in the Ehrenhaus action denied preliminary injunctive relief with respect to, among other things, the issuance and voting of preferred shares issued by Wachovia to Wells Fargo on October 20, 2008 in connection with the merger that represent 39.9% of the voting power of Wachovia’s capital stock. 

Perella Weinberg did not perform certain analyses that it customarily would have prepared for Wachovia in connection with a fairness opinion because analyses of the kind that are often performed, such as a comparable company analysis or a discounted cash flow analysis, were not meaningful as a result of the extraordinary circumstances facing Wachovia as described in Perella Weinberg’s opinion.

The following disclosure supplements the discussion at page 47 of the proxy statement concerning the scope of the review conducted by Perella Weinberg:

In addition, Perella Weinberg did not review individual credit files nor did it make an independent evaluation or appraisal of any of the assets and liabilities (including any contingent, derivative or off-balance-sheet assets and liabilities) of Wachovia or Wells Fargo or any of their respective subsidiaries, and it was not furnished with any such evaluation or appraisal.

The following disclosure supplements the discussion at page 49 of the proxy statement concerning Perella Weinberg’s analyses of Wells Fargo common stock based on trading multiples that Perella Weinberg considered appropriate:

The companies that Perella Weinberg reviewed in determining the appropriate trading multiple ranges were as follows: National Banks: Bank of America Corporation, JPMorgan Chase & Co. and Citigroup Inc.; Regional Banks: U.S. Bancorp, PNC Financial Services Group, Inc., BB&T Corporation, Capital One Financial Corporation, SunTrust Banks, Inc., M&T Bank Corporation, Regions Financial Corporation, Fifth Third Bancorp, National City Corporation, KeyCorp and Marshall & Ilsley Corporation.

http://www.sec.gov/Archives/edgar/data/36995/000095014408009382/g17053dadefa14a.htm

Wachovia was advised on the transaction by Sullivan & Cromwell LLP, Goldman Sachs & Co. and Perella Weinberg Partners.

https://www.wellsfargo.com/press/2008/20081003_Wachovia

Perella Weinberg was selected to act as financial advisor to the board of directors of Wachovia in connection with the merger because of its qualifications, expertise, reputation and knowledge of the financial services industry, and pursuant to an engagement letter dated September 28, 2008, will receive fees for its services, of which $5 million was payable upon the execution of the merger agreement, and $20 million is contingent upon the closing of the merger. In addition, Wachovia has agreed to indemnify Perella Weinberg for certain liabilities and to reimburse Perella Weinberg for certain expenses arising out of its engagement. Except pursuant to such engagement letter between Wachovia and Perella Weinberg, Perella Weinberg has not, in the past, provided investment banking or other financial services to Wachovia or Wells Fargo. In the ordinary course of its business activities, Perella Weinberg or its affiliates may at any time hold long or short positions, and may trade or otherwise effect transactions, for their own account or the accounts of customers, in debt or equity or other securities (or related derivative securities) or financial instruments (including bank loans or other obligations) of Wachovia or Wells Fargo or any of their respective affiliates. Perella Weinberg also may provide investment banking and other financial services to Wachovia, Wells Fargo and their respective affiliates in the future, and may receive compensation in connection with such services. However, Perella Weinberg is not currently engaged to provide additional investment banking and other financial services to Wachovia or Wells Fargo, except as specifically disclosed above.

http://secfilings.nyse.com/filing.php?ipage=5986071&DSEQ=&SEQ=55&SQDESC=SECTION_PAGE

http://caselaw.findlaw.com/nc-court-of-appeals/1581789.html

On October 3, before approving the merger with Wells Fargo, the Board discussed the urgent need for Wachovia to be able to obtain funding to sustain its operations pending a closing of the merger. We were informed and understood that, absent the ability to obtain significant immediate funding from Wells Fargo and substantial assurance to the financial markets and the Federal Reserve that the merger with Wells Fargo was likely to be closed, it was extremely unlikely that Wachovia would be able to avoid receivership pending consummation of a merger with Wells Fargo. The company's advisors and Mr. Steel told the Board that unless a definitive merger agreement was signed with Wells Fargo or a transaction was finalized with Citigroup by the end of the day Friday, October 3, they believed the FDIC was prepared to place Wachovia's banking subsidiaries into receivership.

Shortly after the merger agreement was signed and the merger was announced, Wachovia was able to obtain the financing it needed from Wells Fargo and from other sources of funding.

Wachovia's financial advisors (Goldman Sachs and Perella Weinberg) informed 

Wachovia that the type of analysis customarily performed was not meaningful for Wachovia 

because of the extraordinary circumstances faced by Wachovia and its severe liquidity crisis, as 

is indicated at pages 48-57 of the S-4

In considering the Wells Fargo merger, no one on the Wachovia Board gave any 

consideration to any benefits that any Wachovia Officer or Director might enjoy personally as a 

result of a merger with Wells Fargo. Except for Mr. Steel, Wachovia's Board is comprised of 

outside directors. I understand that the plaintiff contends that personal interests may have played 

some role in consideration of the merger, and I can unequivocally state that no one's personal 

interests played any role whatsoever in the Board's deliberations and decisions. 

http://www.ncbusinesslitigationreport.com/uploads/file/Young%20Affidavit.pdf

Greg Jones, Esq.
GREG JONES & ASSOCIATES, P.A.
3015 Market Street
Wilmington, NC 28403
greg@gregjoneslaw.com

Carl Stine
WOLF POPPER LLP
845 Third Avenue
New York, NY 10022
cstine@wolfpopper.com

T. Thomas Cottingham, III
Hunton & Williams, LLP
Bank of America Plaza, Suite 3500
101 S. Tryon Street
Charlotte, NC 28280
tcottingham@hunton.com

Paul K. Rowe
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
pkrowe@wlrk.com

http://www.ncbusinesslitigationreport.com/uploads/file/Ehrenhuas%20Motion%20Expedite.pdf

http://www.ncbusinesslitigationreport.com/uploads/file/Steele%20Aff%20with%20Exh%20(4).pdf

Read more here: http://www.charlotteobserver.com/2014/05/28/4937745/former-wachovia-ceo-bob-steel.html#.U4_cEfldWnY#storylink=cpy

http://www.ncbusinesslitigationreport.com/uploads/file/Steele%20Aff%20with%20Exh%20(4).pdf

http://www.ncbusinesscourt.net/opinions/2011_NCBC_3.pdf

In particular, Perella Weinberg was informed by Wachovia that:

  • Wachovia’s liquidity position was severely strained due in large part to declining customer and counterparty confidence, and that Wachovia may have had insufficient unrestricted cash on hand to meet its needs in the near term;

  • Wachovia and its principal operating subsidiaries had a limited amount of unencumbered assets available as collateral for any financings that Wachovia may have sought to obtain on an immediate basis;

  • as a result of general market conditions and matters specific to Wachovia’s financial condition, Wachovia would not at the time have been able to raise capital through the capital markets in amounts sufficient for its needs, and this difficulty was expected to continue for the foreseeable future;

  • the United States banking regulators had not offered financial assistance to Wachovia on a stand-alone basis to adequately address the financial situation of Wachovia, including its immediate and long-term liquidity needs;

  • Wachovia projected substantial losses for the remainder of fiscal year 2008 and for fiscal year 2009, which would put significant strain on Wachovia’s ability to maintain its capital position in the near term in light of difficulties Wachovia faced in seeking financings and accessing the capital markets;

  • downgrades of Wachovia’s credit ratings that Wachovia’s management expected to be announced by Moody’s Investors Service and Standard & Poor’s, which remained imminent absent a transaction (such as the merger) that would provide Wachovia with sources of substantial ongoing liquidity and funding or that would relieve Wachovia of the need for such liquidity and funding would further negatively affect customer and counterparty confidence in Wachovia, and Wachovia’s liquidity and access to the capital markets; and

  • absent immediately entering into a definitive transaction (such as the merger) that would provide Wachovia with sources of substantial ongoing liquidity and funding or that would relieve Wachovia of the need for such liquidity and funding, Wachovia and its subsidiaries would face intervention by the United States federal banking regulators and/or be required to seek protection under applicable bankruptcy laws.

http://www.sec.gov/Archives/edgar/data/36995/000095012308016149/y72243dmdefm14a.htm

Moody's said its ratings on Wachovia are supported by a robust liquidity profile at both the holding company and at the bank. Wachovia's cash position at the holding company is large, allowing it to meet potential cash obligations into 2011 even if it received no dividends from its bank subsidiaries. Moody's also believes that Wachovia Bank is a net overnight lender into the system as opposed to being a net overnight borrower. In addition, Wachovia Bank has sizable unutilized capacity at the Federal Home Loan Banks.

https://www.moodys.com/research/Moodys-cuts-Wachovias-ratings-snr-to-A1-outlook-negative--PR_159648

On 26 September 2008, Wachovia, the fourth-largest bank in the United States, lost $5 billion in deposits—about one percent of its total deposits—when several large customers (mostly businesses and institutional investors) drew down their accounts below the $100,000 limit for FDIC deposit insurance. This practice is known in banking circles as a "silent run." The Office of the Comptroller of the Currency and the FDIC were both concerned that Wachovia wouldn't have enough short-term funding to open for business on 29 September—which would have resulted in a failure dwarfing that of WaMu just a day earlier. They pressured Wachovia to put itself up for sale

http://en.wikipedia.org/wiki/List_of_bank_runs

"Today ... we finally learn the truth - and it is astounding," Sanders said in a statement. "We now know that Fed loaned trillions of dollars at zero or near-zero interest rates not only to the largest financial institutions in this country, but also to many of our largest corporations - including GE, McDonalds and Verizon. Most surprising, the Fed also lent huge sums of money to foreign private banks and corporations."

http://blackpoliticalbuzz.blogspot.com/2010/12/bofa-wells-fargo-top-recepients-of-feds.html

"I think the company is worth a lot more," he said, noting Wachovia shares traded at $40 a year ago.

Moore, who oversees the state pension fund that owns 3.2 million Wachovia shares, called on other shareholders to vote against the Wells Fargo deal, which he described as "highway robbery." The Charlotte-based bank would be better off on its own, he said.

"Let's at least make sure we've done everything we can to make sure this company doesn't, in essence, disappear," he said.

Wachovia employs about 20,000 people in Charlotte, 2,000 in the Triangle and about 3,600 in Winston-Salem, where Wachovia was headquartered before its merger with First Union.

By remaining independent, Wachovia might be eligible to apply for funds from the $700 billion government bailout of the financial industry, he said.

When struggling automakers lined up for money from the bailout plan, Moore said, he became angry that Wachovia wasn't thrown a similar lifeline before Citigroup and Wells Fargo swooped in to buy it on the cheap.

"If government is going to start picking winners and losers, how come Wachovia was left in musical chairs without the chair? he said.

Moore said the state should also be willing to step in with its own rescue package in addition to any federal money Wachovia might get.

"Are we all really going to sit so quietly and watch 20,000 jobs in Mecklenburg County alone be put on the chopping block?" he said.

Duke University finance professor Campbell Harvey also said many struggling companies are lining up like children in a candy store for federal bailout money.

"It's a pipe dream to think that the government is going to come in and bail (Wachovia) out once a deal is in place with no government assistance," Harvey said. "Everybody wants to grab some candy right now, but it seems extremely unlikely, given that Wachovia's already gone through two deals."

Moore's idea didn't get much traction Wednesday, as Wachovia shareholders gave Wells Fargo Chief Executive John Stumpf a warm reception in Winston-Salem.

http://www.wral.com/news/local/story/3948927/#H0t4Smt0pj6wzmCe.99

http://www.ncbusinesslitigationreport.com/2008/11/articles/class-actions/north-carolina-state-treasurer-says-wachoviawells-fargo-merger-is-highway-robbery/

http://www.ncbusinesslitigationreport.com/uploads/file/Richard%20Moore%20Letter.pdf

http://www.ncbusinesslitigationreport.com/uploads/file/William%20B%20%20Greene%20Letter.pdf