A $275 million settlement has been reached in a nationwide shareholder lawsuit stemming from the near-collapse of the former Wall Street investment bank Bear Stearns Cos, court papers show.
The all-cash settlement resolves claims that Bear, and several officials including former Chief Executive James Cayne, misled investors about the company's deteriorating financial health before it was acquired by JPMorgan Chase & Co.
The lead plaintiff, the State of Michigan Retirement Systems, filed settlement papers Wednesday night with the fe deral court in Manhattan. It has asked U.S. District Judge Robert Sweet to grant preliminary approval to the accord.
Calls to JPMorgan and to lawyers for Cayne and several other former Bear officials were not immediately returned.
JPMorgan agreed to buy Bear in March 2008 in an emergency buyout brokered by the U.S. Federal Reserve.
Bear had been driven to the brink of collapse when fleeing clients caused a liquidity crunch. JPMorgan agreed to pay $10 per share for the 85-year-old investment bank, far below the $170 that Bear shares once commanded.
In April, Sweet granted preliminary approval to a $10 million settlement for former Bear employees who lost roughly $215 million from owning company stock in their retirement plan.
The case is In re: Bear Stearns Companies Inc Securities, Derivative and ERISA Litigation, U.S. District Court, Southern District of New York, No. 08-md-01963.
© 2021 Thomson/Reuters. All rights reserved.