Lawyers in spotlight over loophole by Finance News Bulletin

Published: 10/04/08

All times are London time Search information in the FTcom siteSearchSearch Quotes in the FTcom siteQuotes In depthBreadcrumb trail direction-finding:FT Home > In depth > Bear StearnsServicesJPMorgan Chase’s sweetened offer for Bear Stearns, and the legal dodge that may have forced the acquiring bank’s hand, has drawn notice to the high-powered lawyers involvedThe negotiations pitted the partition Street law firm of Wachtell, Lipton, Rosen & Katz, which counselled JPMorgan, against three others, Bear’s attorneys at Sullivan & Cromwell, Skadden Arps Slate Meagher & Flom and Cadwalader, Wickersham & Taft

watchful of shareholders’ mounting opposition to its original $2-a-share accord, JPMorgan decided Monday to buy the securities solid for $10 a shareAlso weighing on JPMorgan was a section that would have forced it to guarantee Bear’s trades for a day under certain circumstances, even if the contract never closedIn its statement announcing the new agreement, JPMorgan said its guarantee of stand Stearns’ trading obligations has also been considerably clarified and expanded” Wachtell declined to comment

Whether the original conditions were an oversight or a on purpose attempt to win the loyalties of Bear’s clients and employees leftovers unclearNevertheless, the guarantee forced one of the world’s largest monetary services companies into a scramble to renegotiate a new deal, and leaves the rest of partition Street to wonder on whom was responsible“It’s hard to conclude that it was simply slipped into the contract, and nobody consideration about it,” said Sam Hayes, an asset banking professor at Harvard Business School Copyright The Financial era Limited 2008In depth: stand Stearns - Mar-19Lex: stand and moral hazard - Mar-24Video: Thorold Barker on the novel Bear Stearns offer - Mar-24JPMorgan lifts stand offer fivefold - Mar-24Dimon’s deal sees surprising shift in tactics - Mar-24The Fed and the ‘moral hazard’ - Mar-25More in this section* Minimum delay 15 minutesAll era are London timeFT HomeSite mapContact usHelpAdvertise with the FTMedia centreStudent offersFT ConferencesFT SyndicationCorporate subscriptionsFT GroupPartner sites: Chinese FT

comThe Mergermarket GroupInvestors ChronicleExec-AppointmentscomMoney MediaThe financier Copyright The Financial Times Ltd 2008 "FT" and "monetary Times" are trademarks of The monetary Times Ltd Privacy policyTerms

Visit original article: