Other Bear Stearns news: Congressional probe on the way; Bear staff faces the grim reality; JP Morgan tries to retain the brokers; Impact on the NYC office market; The day $10.4 billion was pulled out; Investors seek restraining order but may get no love

• Congress scrutinizing Bear Stearns purchase by JP Morgan
• Bear Stearns staff face reality of buyout
• JPMorgan Chase lures Bear brokers
• Bear fire sale rattles Manhattan office market
• The day Wall Street pulled $10bn from Bear Stearns and forced sale$
• Bear Stearns Investors Challenge JPMorgan Share Deal
• Bear should expect no sympathy

Congress scrutinizing Bear Stearns purchase by JP Morgan - AP via BostonHerald.com

Two key senators are demanding details of the last-minute sale of failing investment bank Bear Stearns to JP Morgan, and how the Federal Reserve Bank’s backing for the deal could affect taxpayers.

Sen. Max Baucus, D-Mont., the Finance Committee chairman, and Sen. Charles E. Grassley of Iowa, the panel’s top Republican, wrote today to executives of both firms, Treasury Secretary Henry M. Paulson and Fed Chairman Benjamin S. Bernanke seeking specifics of the transaction by week’s end. They said they wanted answers on how taxpayers would fare under the deal, which the Fed helped broker and guarantee in an extraordinary move aimed at preventing a meltdown of the U.S. financial system.

The move was another sign that Congress, racing to deal with a housing mess that encapsulates voters’ deep concerns about the economy, has placed the financial crisis at the top of the election-year agenda, with investigations and sweeping legislation likely to follow.

"Americans are being asked to back a brand-new kind of transaction, to the tune of tens of billions of dollars," Baucus said in a statement. "Economic times are tight on Main Street as well as on Wall Street, and we have a responsibility to all taxpayers to review the details of this deal."....

Bear Stearns staff face reality of buyout - Reuters

Employees at Bear Stearns Cos were hardly celebrating the day after JPMorgan Chase & Co raised its bid for Bear five-fold.

Instead, resignation, bitterness and anger gripped Bear staffers, who are also major shareholders, as they bustled into the fallen investment bank's headquarters on a crisp, clear day in New York.

The new offer, while higher, was 88 percent below the stock's value a month ago, wiping out what was for many the bulk of their personal wealth.

The mood is "very quiet, depressing. People are resigned to it," one Bear employee, who has been at the company more than three years, said during a cigarette break outside the company's headquarters in midtown Manhattan, which JPMorgan has secured the rights to buy at a discount even if the deal fails.....

JPMorgan Chase lures Bear brokers - Financial Times

JPMorgan Chase is offering Bear Stearns’ best brokers annual bonuses of more than $500,000 in an effort to prevent an exodus of talent as a result of its planned takeover of the stricken investment bank.

People close to the situation said JPMorgan, which raised its all-stock bid to buy Bear from $2 to $10 per share on Monday, told the firm’s 400-plus private client brokers that those bringing in more than $500,000 in revenues would receive a bonus of up to 100 per cent of the total revenue they generated.

Three-quarters of the bonuses will be paid in cash and a quarter in JPMorgan shares. Brokers generating between $250,000 and $500,000 a year will receive 50 per cent of their total, half in cash and half in stock, while brokers bringing in less than $250,000 will not get a bonus.....

Bear fire sale rattles Manhattan office market - Reuters

The Manhattan office market can withstand the fire sale of Bear Stearns Cos Inc, but if other financial firms disintegrate, flat rents and lower values already expected could turn into a sharp decline.

"The real test is how big are the ripples from this and how far are they going to extend," John Houck, senior managing director of Weiser Realty Advisors LLC, said.

"I feel a little like we're tipping at the edge of the roller coaster," he said. "For the moment, I hope it will be just a small ride down and it will tip back up again."

Last week, Bear Stearns nearly collapsed under the weight of the credit crisis. JPMorgan Chase & Co has agreed to buy the firm, on Monday ratcheting up its initial offer to $2.1 billion from $236 million.

The day Wall Street pulled $10bn from Bear Stearns and forced sale$ - The Times of London

Wall Street pulled $10.4 billion (£5.19 billion) of cash and other highly liquid assets out of Bear Stearns in a single day this month, leaving it with only $2 billion and forcing the stricken securities firm to approach JPMorgan Chase in desperation, it emerged yesterday.

Bear Stearns, which agreed a fire sale to JPMorgan on March 16, four days after the mass withdrawal of funds, saw its so-called liquidity pool evaporate after customers and counterparties suffered a crisis of confidence in it, according to Christopher Cox, chairman of the US Securities and Exchange Commission (SEC).

Bear's liquidity pool, which stood at $21 billion early this month, fell dramatically from $18.1 billion to $11.5 billion on March 10 “as rumours spread about liquidity problems at Bear Stearns, which eroded investor confidence”, Mr Cox wrote in a letter to Nout Wellink, chairman of the Basel Committee on Banking Supervision, which has been seen by The Times.

Wall Street offered some respite on March 12, pushing Bear's liquidity pool up slightly to $12.4 billion, before it crashed to $2 billion the following day, according to data supplied by Bear Stearns to the SEC that was contained in Mr Cox's letter.....

Bear Stearns Investors Challenge JPMorgan Share Deal - 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....

Bear should expect no sympathy - The Deal 

Bear Stearns Cos. shareholders are howling about the way the troubled investment bank agreed to sell to J.P. Morgan Chase & Co. The insurgents, led by 9.9% shareholder Joe Lewis, claim that Bear Stearns signed one sweetheart deal at $2 per share followed by another a week later at $10 a share, both of which violate Delaware law in numerous ways.
 
  If this were the $237 million or even $1 billion sale of the average troubled company on the brink of bankruptcy, the shareholders might have an excellent chance of success. Delaware law disfavors actions by a target's board that coerce shareholders into voting for a deal or preclude another bid. For instance, Bear Stearns gave J.P. Morgan a $1.1 billion option on its building in the event Bear Stearns shareholders vote down the deal. That might well be coercive in normal circumstances and is very similar to the so-called "crown jewel lock-ups" that the Delaware courts banned in the 1980s.....