Source: tradingmarkets.com

Wachovia Corp. lost $5 billion in deposits on Sept. 26 in a “silent run” on the Charlotte bank, leading regulators to tell Wachovia that it would be shut down within days if it were not acquired, according to court filings made by Citigroup on Friday.

The bank run began the day after the stunning failure of Washington Mutual. Around 5 a.m. that morning, Wachovia chief executive Bob Steel called Citigroup CEO Vikram Pandit to talk about a possible deal. During the day, Wachovia’s stock would plunge 27 percent, adding urgency to the situation.

During intense negotiations that weekend, Wachovia agreed to sell most of its operations to Citi under the direction of the Federal Deposit Insurance Corp. Four days later, however, Wells Fargo & Co. swooped in with a rival bid, which Wachovia accepted. That spurred a legal fight and negotiations to possibly carve up Wachovia among Citi and Wells. On Thursday, Citi backed down, allowing Wells to move forward with its purchase of Wachovia, although Citi is still seeking damages in court.

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