There has been a truce in the legal battle over Wachovia. Citigroup, Wells Fargo, and Wachovia have agreed to hold off until noon on Wednesday in an effort to reach a compromise.

Legal escalation came quickly here. Barring an agreement, there are now three lawsuits filed in three separate venues, triggered by the surprise announcement, on Friday, that Wells Fargo had stepped in with a deal to upend Citigroup's proposed rescue of Wachovia.

Let's take a breather, shall we? Citigroup, when it announced this weekend, that it would file a complaint, said it was looking for specific performance.

But specific performance of just what exactly?

"It's not specific performance of the deal it is of the negotiating," says Elizabeth Nowicki, a corporate law professor at Tulane Law School and author of the blog, www.truthonthemarket.com.

The complaint filed today accuses Wells Fargo of tortuous interference with contract.

What contract would that be? "I don't think the tortuous interference with contract claim goes far against Wells Fargo," says Nowicki. The lawsuit says Citi would seek $60 billion --- $20 billion in compensatory damages and another $40 billion in punitive damages against Wachovia and Wells Fargo and their respective directors.

Nowicki is equally dismissive of a ruling over the weekend from a North Carolina judge who suspended the exclusivity agreement, basically invalidated the exclusivity agreement. That letter agreement, she said, "holds up, just like any other valid, binding contract." Trouble is, if the Wachovia board went back to the negotiating table with Citi, would they be there in body only?

Meanwhile, there's been a lot of talk about the "fiduciary out" that Wachovia directors should have, to take the better offer from Wells Fargo. But Nowicki points out that the "exclusivity contract was the alternative to going belly up. They were operating almost under duress."

Last but not least, there are claims by Wachovia, which argues that a provision in the new federal bailout law allows it to negotiate a merger with a third party despite the exclusivity agreement.

That lawsuit is pending in federal district court in Manhattan, and has now been assigned to U.S. District Judge Lewis Kaplan, a brilliant corporate mind who last made headlines when he oversaw a lawsuit between two hedge funds and the management of CSX Corp. Nowicki, for one, thinks Wachovia is misreading the new statute. All that the new law provides, she says, is relief from liability to the federal government for a "deal jumper" such as s

Kaplan came on the scene just today. Another federal judge was scheduled to hold a hearing tomorrow at noon in the case, and whether that hearing is still planned is anyone's guess.

One prominent M&A lawyer says all the fuss in court will be a "sideshow" in the end.

"I don't think the government is going to let this go on for weeks," he said. He predicts a "carve-up" of some kind between Citi and Wells Fargo of the Wachovia assets.

Karen Donovan