* Plaintiffs say Bear knew business, stock were risky
* Breach of fiduciary duty alleged
* JPMorgan bought Bear in Fed-brokered takeover in 2008
March 21 Former Bear Stearns Cos workers who
suffered large losses by holding company stock in their
retirement plan will recover $10 million in a settlement with
JPMorgan Chase & Co, which bought Bear in 2008, court
The settlement addressed claims raised on behalf of more
than 8,400 people who lost roughly $215 million in retirement
savings by owning Bear stock in an employee stock ownership plan
between Aug. 1, 2007 and March 24, 2008, court papers show.
It was filed Tuesday night with the U.S. District Court in
Manhattan following more than two years of mediation, and
requires court approval.
Neither JPMorgan nor lawyers for the plaintiffs immediately
responded to requests for comment.
The plaintiffs' lawyers in court papers called the
settlement "fair, adequate, and reasonable," and reflected the
risk that available insurance coverage could be depleted.
JPMorgan bought Bear in May 2008 for $10 per share, far
below the $170 that the stock once commanded, in a buyout
brokered by the U.S. Federal Reserve.
The transaction occurred after fleeing clients led to a
liquidity crunch at Bear, driving the 85-year-old investment
bank to the brink of collapse.
According to the 228-page complaint, Bear knew its business
model, being heavily tied to risky mortgages, was unsustainable,
making it imprudent and a breach of fiduciary duty to include
company stock in the retirement plan.
Lead plaintiffs in the case are Shelden Greenberg, a Staten
Island, New York resident who worked at Bear from 1981 to 2003;
and Aaron Howard, a Los Angeles resident who worked at Bear from
1995 to 2007.
The case is In re: Bear Stearns Companies ERISA Litigation,
U.S. District Court, Southern District of New York, No.