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First Union has dropped its primary Georgia counsel in the midst of its merger litigation, and its former firm now will represent potential merger partner Wachovia Corp. Bondurant, Mixson & Elmore had served as outside Georgia counsel for First Union in its battle with SunTrust Banks Inc. to acquire Wachovia. J. Kirk Quillian, head of Troutman Sanders Mays & Valentine’s complex litigation group in Atlanta, says his firm came on board with the First Union litigation on May 29. Historically, First Union National Bank, a subsidiary of First Union Corp., has been a Troutman Sanders client. Wachovia associate general counsel and senior vice president Michael E. Ray confirms that the bank has hired Atlanta-based Bondurant Mixson, but wouldn’t comment further. Walter G. Moeling IV, a banking partner with Powell Goldstein Frazer & Murphy in Atlanta, says it’s not unusual for a law firm to go from one party to another in a merger deal. Bondurant Mixson, Moeling says, “is being called on to litigate a point.” That point, Moeling adds, is one in which both Wachovia and First Union share a common goal. That reduces the likelihood of conflicts of interest between the banks. It would be different if the same law firm were providing business advice to the boards of two different banks on a prospective basis, Moeling says. But, he notes, “what’s being litigated is the propriety of what already happened.” Also, Moeling says, Bondurant Mixson’s jump from First Union to Wachovia signifies unity for the banks. “It certainly further enhances the strategy of Wachovia-First Union,” Moeling says. Powell Goldstein is not involved in the merger or the surrounding litigation. Bondurant had made an appearance on behalf of First Union as late as May 24, says partner H. Lamar Mixson. Mixson says the firm hasn’t made any appearances on behalf of Wachovia yet. First Union National Bank and its parent company, First Union Corp., joined with Wachovia to file suit against SunTrust in Charlotte last month. First Union and Wachovia allege that SunTrust interfered with the First Union-Wachovia merger. The plaintiffs seek a declaration that SunTrust can’t challenge or invalidate certain stock option agreements made by Wachovia and First Union. SunTrust has not yet answered the complaint. First Union Corp. v. SunTrust Banks, No. 1-CVS-10075 (Mecklenburg Super. May 23, 2001). Last Thursday, SunTrust made a failed attempt to transfer the case to federal court in Charlotte, N.C.. District Court Judge Lacy H. Thornburg of the Western District of North Carolina ruled there wasn’t diversity of citizenship or a federal question involved in the case and remanded it to superior court in Charlotte. First Union Corp. v. SunTrust Banks, No. 3:01CV287 (W.D. N.C. May 31, 2001). And on Friday, Wachovia, SunTrust and First Union stipulated to transferring the case to North Carolina’s Special Superior Court for Complex Business Cases, commonly called the North Carolina Business Court. Not included in the transfer are two class-action suits filed by SunTrust and Wachovia shareholders against Wachovia and First Union in Fulton County Superior Court. Wyatt v. Baker, No. 2001-CV-38062 (Fult. Super. May 16, 2001); Drucker v. Wachovia, No. 2001-CV-38351 (Fult. Super. May 23, 2001). Finally, all the parties in the suits stipulated that SunTrust would dismiss its suit against Wachovia’s board of directors. SunTrust Banks v. Baker, No. 2001-CV-38256 (Fult. Super. May 23, 2001). All claims pending under state law will be brought in the North Carolina Business Court, says Jack N. Sibley, business litigation partner of Hawkins & Parnell in Atlanta. Hawkins & Parnell represents SunTrust in its superior court and federal court suits against the Wachovia directors. SunTrust’s suit against Wachovia and First Union will remain in federal court in Atlanta, Sibley says. SunTrust Banks v. Wachovia Corp., No. 1:01-CV-1309 (N.D. Ga. May 22, 2001). Atlanta-based King & Spalding continues to represent SunTrust in its litigation, says Managing Partner Walter W. Driver Jr. In the North Carolina Business Court case, First Union is represented by Charlotte’s Robinson, Bradshaw & Hinson. New York’s Sullivan & Cromwell serves as co-counsel for First Union. Winston-Salem, N.C.’s Bell Davis & Pitt as well as Greensboro, N.C.’s Brooks, Pierce, McLendon, Humphrey & Leonard represent Wachovia. And Raleigh, N.C.’s Ellis & Winters and Charlotte, N.C.’s Bishop, Capitano & Abner serve as North Carolina counsel for SunTrust. In the federal court suit, New York’s Skadden, Arps, Slate, Meagher & Flom serves as co-counsel for SunTrust.

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