United States v. WACHOVIA CORPORATION, 313 F. Supp. 632 (W.D.N.C. 1970)

Jerome A. Hochberg, Daniel R. Hunter, Peter C. Carstenson and Fred L. Woodworth, U. S. Dept. of Justice, Washington, D. C., and David B. Sentelle, Asst. U. S. Atty., Charlotte, N. C., for plaintiff.

Clifford, Warnke, Glass, McIlwain & Finney, by Larry L. Williams, Washington, D. C., and Smith, Moore, Smith, Schell & Hunter, by Beverly C. Moore, Greensboro, N. C., for defendant, The Wachovia Corp.

Does R. Withrow, Jr., and Sanford M. Litvack, New York City, Helms, Mulliss & Johnston, by E. Osborne Ayscue, Jr., Charlotte, N. C., for defendant, American Credit Corp.

On April 24, 1970, the United States filed suit in this court against The Wachovia Corporation (Wachovia), a one bank holding company, and American Credit Corporation (American), seeking to restrain the proposed acquisition on erican

midfirst bank personal loans

The action was brought under 15 U.S.C. 18 ( 7 of the Clayton Act), which reads in pertinent part as follows:

«No corporation engaged in commerce shall acquire, directly or indirectly, *633 the whole or any part of the stock or other share capital and no corporation subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another corporation engaged also in commerce, where in any line of commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.»

Its consumer loan subsidiaries have some 253 offices in 14 states

A temporary restraining order against the proposed acquisition was entered after a hearing on Saturday, April 25, 1970, by Judge Wilson Warlick. The case is before the court now upon the motion of the plaintiff for a preliminary injunction further restraining the acquisition until trial on the merits.

Testimony was taken on three days, May 13, 14 and 15, 1970, and the parties have filed briefs and requests for findings of fact and conclusions of law.

On or about erican announced that the companies were holding discussions concerning a possible merger. Information on the merger was online payday loans Minnesota sought by the Justice Department and was duly supplied.

In December of 1969, Wachovia received the approval of the Comptroller of the Currency to acquire the stock of American (Camp Affidavit, Appendix A).

On January 29 and January 30, 1970, the respective Boards of Directors approved an agreement, subject to ratification by the stockholders, whereby Wachovia would purchase the stock of American (GX 71).

The agreement provides that American shareholders will receive one share of a new convertible preferred stock of Wachovia for each two shares of American. The Wachovia preferred stock would be convertible to 1.08 shares of common stock (R. 354-55; GX 71)mingling of the assets of the two companies is not contemplated (Sanders Affidavit, 21).

On erican’s common stock was trading at $ per share on the New York Stock Exchange. Apparently based on a leak or rumor as to the Government’s suit, there was a flood of sell orders and the Exchange suspended trading in the stock. At 3:00 P.M. on that day, the Department of Justice announced its intention to sue to block the merger. When the Exchange resumed trading that day, as required by law, American’s common stock sold at $23 per share.

1. The scheduled effective date of the merger was April 27, 1970, which was the Monday following the Saturday morning upon which the restraining order was entered.

2. American is a North Carolina corporation with several subsidiaries and with its headquarters in Charlotte. Its total assets, according to its 1969 Annual Report, were $383,502,320. It has 326 offices in fifteen states: Alabama, Florida, Georgia, Indiana, Kentucky, Louisiana, *634 Michigan, Mississippi, North Carolina, Ohio, South Carolina, Tennessee, Texas, Virginia and West Virginia. Of these, 59 offices are located in 44 North Carolina cities and towns. Its sales financing subsidiaries have 73 offices in 9 states. Thirty-one of these offices are located in some of the same 44 North Carolina cities and do business under the name of American Credit Company (GX 2, pages 15, 16, 18 and 30).