Stunned Bear Stearns investors bring legal claims

By Martha Graybow

NEW YORK (Reuters) - Angry Bear Stearns Co Inc shareholders have wasted no time in bringing legal claims following the company's stunning stock collapse and $2-a-share fire sale to JPMorgan Chase & Co.

At least one federal lawsuit in New York seeking class- action status for alleged securities fraud was filed on Monday by an investor contending the company hid its true financial condition from shareholders.

Also filed was a lawsuit from a company worker who held Bear Stearns shares in his retirement portfolio and says the company failed to properly manage risks in the pension plan. That suit also seeks class-action status.

Other investors may bring cases challenging the company's pact to sell itself for a rock-bottom price, legal experts say. But courts are seen as unlikely to kill the buyout deal.

That is because the venerable investment bank, which agreed to the emergency deal under pressure from the U.S. Federal Reserve as the credit crunch widens, appears to have few other options short of filing for bankruptcy, legal experts say.

Shareholders "could move to enjoin the deal, but that's a tough hurdle," said Michael Kelly, a partner at law firm McCarter & English in Wilmington, Delaware, who specializes in defending corporations in litigation. "I'm sure the board is going to say this is the best option in our judgment."

Another lawyer, Ira Press of class-action firm Kirby McInerney, said "there is a possibility that investors will challenge the fairness of the deal, though I would suspect that at this point, Bear Stearns must be in dire straits" and that's why it agreed to the buyout.

The company is being sold for just $236 million. The deal's value is more than 90 percent below the company's Friday closing share price of $30.85. But JPMorgan said the price tag would total about $6 billion to account for litigation and severance costs.