Detroit Police and Fire Retirement System sued Bear Stearns Cos. Inc., asking a judge to halt JPMorgan Chase & Co.s planned buyout of the investment bank for $2 per share.
The sale price does not reflect the value of Bear Stearns, the $4.3 billion system said in a complaint in Delaware Chancery Court in Wilmington, which was cited in a Bloomberg report. Shareholders are being shabbily treated given that the transaction was not designed to maximize or even salvage their equity. The system owns 13,500 shares in Bear.
Company directors are duty-bound to effectively expose Bear Stearns to the marketplace in an effort to create an active and open auction, the funds lawyers contend in court papers.
We have no comment on the lawsuit, a Bear Stearns spokesman Russell Sherman told Bloomberg.
Bear Stearns stock closed down 45% to $30 on March 14, the last trading session before JPMorgan announced its $2-per-share offer. After dropping dramatically on news of the bid, the stock gained 63 cents to close at $5.96 on Thursday. Markets were closed in the U.S. on Friday. InvestmentNews