"Wachovia's management kept the Board well and promptly informed of the events, efforts and developments that occurred both before and after September 16th, and obtained.guidance and direction from the Board as appropriate on a timely basis.
...Employees with Wachovia's Treasury and Balance Sheet Management group met with the Board on Friday, September 26th and informed the Board that Wachovia would have questionable and unpredictable financing needs during the week of Monday, September 29th' and that at some point during the week, Wachovia would likely have to access the Federal Reserve's discount window for liquidity.
They informed us that Wachovia's liquidity position (cash available to meet current obligations) had declined alarmingly and that the Lehman bankruptcy, Washington Mutual's failure, and other events that began to adversely impact Wachovia in mid September had made it impossible for Wachovia to access its normal sources of liquidity.
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.
...it was equally important that the financial markets and the Federal Reserve have the same assurance so that Wachovia could obtain funding from these sources as well. Absent the ability to obtain such funding, Wachovia faced receivership, which would have destroyed the value of Wachovia as a business franchise and left the shareholders with worthless stock. 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 Board had thoroughly explored all options available for raising capital
...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...
...These advisors indicated that the Wells Fargo merger proposal was fair to the Wachovia shareholders.
...Except for Mr. Steel, Wachovia's Board is comprised of outside directors"
This 17th day of November, 2008.
s/ Robert W. Fuller
Robert W. Fuller
N.C. State Bar No. 10887
ROBINSON, BRADSHAW & HINSON, P.A.
101 North Tryon Street, Suite 1900
Charlotte, North Carolina 28246
Attorneys for Wachovia Defendants