DOW JONES NEWSWIRES

Citigroup Inc.'s (C) lawsuit against Wachovia Corp. (WB), Wells Fargo & Co. ( WFC) and their directors is seeking at least $60 billion, Citi said as it seeks redress for Wells Fargo reaching a deal to acquire struggling Wachovia.

Citi had reached an agreement in principle last Monday to buy Wachovia's banking operations for $2.16 billion, but Wells Fargo swooped in and announced early Friday a $15.1 billion deal to buy all of Wachovia. Citi immediately cried foul, prompting Saturday's suit.

The company is seeking more than $20 billion in compensatory and more than $40 billion in punitive damages from Wells Fargo for tortious interference with Citigroup's deal with Wachovia. Citigroup is also seeking undisclosed "relief" from Wachovia for breaking their deal.

Legal wrangling over the weekend prompted officials from the Federal Reserve to push for Citigroup and Wells Fargo to reach a compromise, one in which could result in the two carving up Wachovia, people familiar with the situation told The Wall Street Journal.

The New York legal fight resolves around the validity of an "exclusivity agreement" Wachovia signed when it reached its deal with Citigroup. A lower- court judge Saturday extended the expiration to Friday from Monday, but an appeals court on Sunday overruled that decision.

Without some sort of compromise, the fate of Wachovia could drag out for weeks or months in a legal battle that leaves the battered bank in limbo, distracted by controversy and further weakened by the mountain of bad loans that led to its government-engineered deal with Citigroup last week.

Citi shares were recently down 11% at $16.30 while Wachovia fell 9.7% to $5.61 and Wells Fargo dropped 3.7% to $33.25.

- By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136; kevin.kingsbury@ dowjones.com

- By David Enrich, Dan Fitzpatrick and Damian Paletta, The Wall Street Journal

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