Reuters: Stunned Bear investors eye legal claims

[seafan]

Stunned Bear investors eye legal claims

By Martha Graybow
March 17, 11:19 am ET

NEW YORK (Reuters) - Angry Bear Stearns Co Inc (NYSE:BSC - News) shareholders have wasted no time in calling their lawyers to pursue potential legal recourse over the company's $2-a-share fire sale to JPMorgan Chase & Co (NYSE:JPM - News).

"I can't divulge privileged conversations, but shareholders don't contact me when they are happy with the way things are going with their investments," said Ira Press, a lawyer at class-action firm Kirby McInerney, which has spoken with dismayed Bear investors about the matter.
"This is a stock that has gone from 50 to 2 literally overnight, and I also know of people who had assumed that the worst had passed when it closed at 30," he said.

Bear Stearns, one of the most venerable names on Wall Street, is being sold for just $236 million in an emergency deal backed by the U.S. Federal Reserve in a sign of the deepening credit crisis.

The deal's value is more than 90 percent below the company's Friday closing share price of $30.85. But JPMorgan said the total price tag would be $6 billion to account for litigation and severance costs.

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"We've been contacted by large individual investors and institutional investors," said Jeffrey Nobel, a partner at class-action law firm Schatz Nobel Izard. "Suffice to say, we are certainly looking very carefully at it."

Shareholders might sue Bear and its executives and officers for securities fraud, contending they failed to disclose the company's true financial health, lawyers say.
Nobel said his firm has been contacted by investors who bought the stock as recently as last week. Some of these buyers, he said, took their positions after Bear CEO Alan Schwartz said in a televised interview on Wednesday that the company does not see any pressure on its liquidity and had about $17 billion in excess cash on its balance sheet.

"You have investors who are upset because they feel as though the company was not truthful in reporting its financial condition," Nobel said.

Other suits may be brought by Bear employees who hold company shares that are now virtually worthless, lawyers said.

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The dominoes that George W. Bush and his Neocons long salivated over will be falling not in the Middle East, but in our own country.