Delaware Court Refuses to Hear Motion to Enjoin JP Morgan - Bear Stears Merger

In an earlier post (here), we reported on the lawsuit pending in Delaware Chancery Court where several pension funds that owned stock in Bear Stearns sought to enjoin the issuance of new shares to JP Morgan which, upon issuance, JP Morgan would own 39.5% of Bear Stearns and be able to vote that stock in favor of the merger at a special meeting of Bear Stearns' shareholders. The hearing on the pension funds' motion for a temporary restraining order to preven the share issuance was heard on March 31st, in advance of the share issuance scheduled for April 8th.

On April 9th, a day after the share exchange took place, the Delaware court issued an opinion staying the action in deference to a similar action filed in New York state court. Over the plaintiffs' protestations that a Delaware court should resolve the legal issues related to the extraordinary lock-up provisions contained in the amendedmerger agreement, the court stated that the case simply involved applying well-settled principals of Delaware law "to evaluate the deal protections in the merger and the alleged breaches of fiduciary duty." Conversely, the court writes that the facts are so unique that it should defer to the New York forum. The court writes: "I find the circumstances of the case to be sui generis. What is paramount is that this Court not contribute to a situation that might cause harm to a number of affected constituencies, including U.S. taxpayers and citizens, by creating a risk of greater uncertainty [caused by parallel proceedings in N.Y. and Delaware]." The court also cited the "the involvement of unusual third party players, inter alia, the Federal Reserve and the Department of the Treasury." Clearly, the Delaware court did not want to touch the merits of this case, and the impact an opinion on the merits could have on Delaware jurisprudence in this area. Although several of the lock-up provisions are clearly problematic under Delaware law, I doubt a New York court is going to take the extraordinary step of enjoining the merger given the potential economic consequences that could follow.

The litigation is also described in the preliminary proxy statement filed with the SEC on April 11th. The filing (here) states the following with respect to the litigation:

Litigation Relating to the Merger

Beginning March 17, 2008, various Bear Stearns stockholders filed several purported class action lawsuits against Bear Stearns, its board of directors and certain of Bear Stearns’ present and former executive officers. Among other things, these actions allege that the individual defendants breached their fiduciary duties and obligations to Bear Stearns’ stockholders by agreeing to the proposed merger. Five of these actions have been filed and consolidated in the Supreme Court of the State of New York under the caption In re Bear Stearns Litigation. The New York plaintiffs have filed a consolidated amended complaint. Two actions have been filed in the Delaware Court of Chancery, and the Delaware plaintiffs filed a motion to consolidate their cases in Delaware, which motion was subsequently granted. JPMorgan Chase is named as a defendant in certain of these cases based on allegations that JPMorgan Chase aided and abetted the alleged breach of fiduciary duty by the Bear Stearns defendants. In each of these actions, the plaintiff seeks to enjoin the proposed merger and enjoin JPMorgan Chase from voting the 95 million shares acquired pursuant to the share exchange agreement. The plaintiffs also seek other injunctive relief and an unspecified amount of compensatory damages. On April 9, 2008 the Delaware Chancery Court granted JPMorgan Chase and Bear Stearns’ motion to stay the Delaware action in favor of the New York action, at least until the preliminary injunction motion is resolved. The parties in the New York action have agreed to a schedule for expedited discovery. A hearing on the plaintiff’s motion for a preliminary injunction in the consolidated New York action is scheduled for May 8, 2008.

Thus, on April 8th the share exchange with JP Morgan was completed. JP Morgan received 95 million shares of Bear Stearns stock in exchange for $930 million worth of JP Morgan stock. When combined with the shares of Bear Stearns that JP Morgan has been purchasing on the open market, it owns at least 47% of Bear Stearns as set forth in JP Morgan's 13D filing with the SEC, virtually guaranteeing that the merger will be approved by Bear Stearns shareholders at the special meeting. Looks like only the litigation could prevent the merger from taking place.

The preliminary proxy statement also contains and fascinating blow-by-blow, hour-by-hour account of the extraordinary events leading up to the merger.

Comments

[S H]

You see how one fraud effects over 5,000 more under this cartel; The judges being in line with corporation bankruptsies, racketeering in all areas, chemical deals, drug deals, pharmaceutical crimes, doctor, medical frauds, being at the top of this obsruction money; 100% fraud in insurance fraud, medical frauds, VA frauds, nanotechnolog never ending radiation frauds, drug frauds in every single area, over 20 million criminals in psychiatry and millions of other fronts to crime indicted, all for drug money back to the top, and obstructions of justice which we won't see for long. Over 50 million judges purposely set up to osbtruct justice by bribery, but suddenly missing, murdered, along with attorneys, and 100% of the agencies, government agencies, fraud, on the public. Total obstructions while there are over 20 billion frauds on all, including those used as 'agents' to the crime.

Missing or set up judges along with the rest of the bribe lines in crime under total satellite. Using judges at the top, with total 20 billion frauds and electromagnetic weapons on the rest, then taking the money to the top drug cartel.

http://www.google.com/search?hl=en&q=judge+indicted

http://www.google.com/search?hl=en&q=%22judge+killed%22

War Crimes, total Obstructions, U.S. Code, International Crimes, National Crimes, enforced electomagentic terrorizing and crimes for over 15 years, while millions already were murdered. Every single area and person, employee replaced, and still using illegal pulse weapons and gangs.

http://journals.aol.com/suehon5