March 25 (Bloomberg) -- Bear Stearns Cos. investors seeking a higher price than JPMorgan Chase & Co.'s bid of $10 a share asked a Delaware judge to halt a stock transaction that may prevent opponents from blocking the takeover.

The judge should delay Bear Stearns' plan to issue 95 million new voting shares, due to close around April 8, until lawyers can argue for a permanent injunction against the deal, the plaintiffs said in papers filed today.

``The lock up stock sale is designed primarily, if not solely, to eviscerate the voting franchise of the current Bear Stearns stockholders,'' lawyer Pamela Tikellis said in the filing in Delaware Chancery Court in Wilmington. The new shares would give JPMorgan a stake of about 40 percent that it will vote in favor of the merger, according to the request.

Requests for a restraining order were made by the Wayne County Employees' Retirement System of Michigan and the Police and Fire Retirement System of the City of Detroit. JPMorgan on March 24 quadrupled its offer for Bear Stearns to $10 a share in stock and agreed to boost its stake in the side deal.

The New York-based companies know that ``stockholders will not vote in favor of the proposed transaction given its blatantly unfair terms,'' and ``devised an improper plan to buy the necessary votes,'' the pension funds' lawyers said.

Bear Stearns spokesman Russell Sherman and JPMorgan spokesman Joseph Evangelisti declined to comment.

`Onerous' Protections

``The combination of onerous deal protections in the merger agreement and related agreements effectively preclude a topping bid'' to rival JPMorgan's, the Wayne County fund said in a March 24 lawsuit.

``JPMorgan is acquiring for practically nothing Bear Stearns' lucrative prime brokerage business,'' the Detroit fund said in a March 20 complaint. The fund says Bear Stearns directors have a duty to sell the company at auction to the highest bidder.

JPMorgan said March 16 it would pursue the takeover after a run on Bear Stearns, the fifth-largest U.S. securities firm and once the biggest underwriter of U.S. mortgage bonds. Clients withdrew $17 billion in two days amid speculation Bear Stearns was running short of cash.

The Federal Reserve stepped in with JPMorgan on March 14 to provide emergency funding in the biggest government bailout of a U.S. securities firm.

Unfair Measures

The Wayne County plaintiffs claim Bear Stearns directors agreed to unfair measures to thwart other suitors, including the sale of its headquarters even if the buyout fails, a provision barring Bear Stearns from terminating the deal, indemnifying directors and officers from lawsuits, and stock payments to employees who stay with the company.

Bear Stearns also faces investor suits in New York. One filed March 17 in Manhattan federal court accuses the company of misleading investors about its finances.

Bear Stearns fell 31 cents to $10.94 in New York Stock Exchange composite trading. The shares have fallen 88 percent this year. JPMorgan fell 49 cents to $46.06, cutting this year's gain to 5.5 percent.

The cases are Police and Fire Retirement System of the City of Detroit v. Bear Stearns Cos., CA3638; and Wayne County Employees' Retirement System v. Cayne and Bear Stearns Cos., CA3643, Delaware Chancery Court (Wilmington).

To contact the reporter on this story: Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net.

Last Updated: March 25, 2008 18:41 EDT