Bear Stearns Companies Inc.

On April 4, 2012, the Honorable Robert W. Sweet granted preliminarily approval of the Class Action Settlement Agreement (“Settlement Agreement”).

Case History:

The Second Amended Consolidated Complaint was filed in the United States District Court Southern District of New York.  The Complaint is on behalf of Plaintiffs and a class of all persons who were participants in or beneficiaries of The Bear Stearns Cos. Inc. Employee Stock Ownership Plan (the “Plan”) and whose accounts included investments in Bear Stearns common stock.

Plaintiffs allege that Defendants breached their fiduciary duties to Plaintiffs and the Class members by:

• failing to prudently and loyally manage the Plan’s assets;
• failing to avoid conflicts of interest; and
• failing to monitor co-fiduciaries.

The Settlement:

The Settlement provides for a payment of $10 million, net of expenses described in the Settlement Agreement, to the Plan for the benefit of the following Settlement Class:

(a) All Persons, who have been participants in The Bear Stearns Companies Inc. Employee Stock Ownership Plan, or the predecessors or successors thereto, at any time between August 1, 2007 and March 20, 2012 and whose accounts included investments in Bear Stearns stock, and (b) as to each Person within the scope of subsection (a) of Section 1.45 of the Settlement Agreement, his, her or its beneficiaries, alternate payees, Representatives and Successors in Interest; provided, however, that, notwithstanding the foregoing, the Settlement Class shall not include any of the Defendants or Immediate Family members of Defendants, except for Immediate Family, beneficiaries, alternate payees, Representatives or Successors in Interest who themselves are members of the Settlement Class with respect to their own Plan accounts. 

The District Court has scheduled a hearing to evaluate the fairness and adequacy of the Settlement.  At the Fairness Hearing, to be held on September 19, 2012, at 12:00 p.m. E.D.T., the Court will consider Named Plaintiffs’ requests for final approval of the Settlement, for class certification, for approval of a proposed Plan of Allocation, for an award of attorneys’ fees and expenses, and for Case Contribution Awards to Named Plaintiffs.  Any objection to the Settlement must be filed with the Court and served upon the counsel listed in the Notice of Proposed Settlement by no later than September 5, 2012.