Bear Stearns Employee Suit Settlement Wins Early Approval
Former Bear Stearns Cos. (BSC) employees won a judge’s preliminary approval of a $10 million settlement of a group lawsuit over losses in their retirement accounts related to the bank’s stock.
The settlement appears to be “fair, adequate and reasonable,” U.S. District Judge Robert Sweet in Manhattan said today in an order. He will hear any objections on Sept. 19 before deciding whether to give final approval, he said.
The settlement was reached on behalf of an estimated 8,400 former employees. It will resolve class-action lawsuits filed beginning in 2008 against Bear Stearns and others. The employees, participants and beneficiaries of Bear Stearns’s employee stock ownership plan who held shares of the bank’s common stock, claimed risky investments in subprime mortgages caused them to lose money.
JPMorgan Chase & Co. (JPM) bought Bear Stearns in March 2008 when the firm was on the brink of failing.
The parties engaged in mediation in October 2009 and pursued negotiations in telephone conferences through last year, the investors said in court papers seeking approval for the agreement. They said the settlement may equal 10 percent to 28 percent of the losses.
The case is In re Bear Stearns Cos. Securities, Derivative and ERISA Litigation, 08-MDL-1963, U.S. District Court, Southern District of New York (Manhattan).
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