The Daily Meltdown: Sorry, Charlotte

The latest aftershock of the credit crisis—Citigroup’s $2+ billion acquisition of Wachovia’s banking operations—spells even more work for elite New York firms. According to Legal Week, Davis Polk and Skadden are advising Citi, while Sullivan & Cromwell is counseling Wachovia on the deal. Meanwhile, Cleary is counsel to the underwriters in an announced $10 billion common stock offering in connection with the acquisition.

But while BigLaw’s elite continue to get paid even amidst a meltdown, Wachovia’s demise brings anxiety and uncertainty to the Tarheel State. Despite CEO Vikram Pandit’s assurances that Citi will maintain a “strong presence” in Charlotte, many expect the local and state economies to take a serious hit. N.C. State economist Mike Walden tells the Charlotte Business Journal, “It goes to what had put Charlotte on the map.” The financial services industry—the single largest component of the North Carolina economy—elevated the city  to “major-league status” and “this is a demolition of that brand.”

Inevitably, the local legal community will feel the pain. Of the state’s  five largest law firms, four represented Wachovia (Womble; Moore & Van Allen; Parker Poe; and K&L Gates (f/k/a Kennedy Covington)). Rather than having represented the late Wachovia, the odd-man-out other top-5 firm, Smith Moore, used to sue them.

-posted by brian