Shareholders Withdraw Motion To Enjoin JP Morgan - Bear Stearns Merger

As reported in Mortgage Meltdown previously (here), on April 9th the Delaware Chancery Court stayed the case filed by several pension funds seeking to enjoin the issuance of new shares of stock to JP Morgan and thus threaten the merger between JP Morgan and Bear Stearns. The Delaware court stayed the case in deference to another action pending in New York state court.

However, as Bear Steans disclosed in an SEC filing on May 8th (here), the plaintiffs in the New York action withdrew their motion to enjoin JP Morgan from voting the new Bear Stearns shares issued to it in support of the merger. Plaintiffs will now only seek damages.

It appears that the decision was made with the approval of the pension funds who filed the Delaware action, who agreed to have their case moved to New York and consolidated with the action pending there (here). This clears the way for the consummation for the merger, since JP Morgan now owns 49.43% of Bear Stearns.

Not so fast though. There is apparently another action pending against Bear Stearns in New York federal court, in which plaintiffs have now asked for leave to file a motion to enjoin the consummation of the merger, according to the same Bear Stearns SEC filing.