Bear seeks curbs on 5 ex-workers
Bear Stearns Cos. asked a court Wednesday for an injunction to prevent five former employees from using Bear Stearns’ client lists in their new jobs at other investment banks.
The request for an injunction came as Bear Stearns struggled to hang onto clients after a run on the bank forced it this month to agree to sell itself to JPMorgan Chase & Co. for a fraction of its previous market value.
Bear Stearns asked a New York state court in Manhattan to force the former employees to return client lists or papers they had taken from the company and to prevent them from contacting Bear Stearns’ clients for the purpose of taking their business to their new employers, UBS and Morgan Stanley.
Bear said in its court filing that former employees who solicited its clients were violating contractual obligations.
Bear asked for a restraining order and a preliminary injunction as it prepares an arbitration claim for the Financial Industry Regulatory Authority.
Morgan Stanley and UBS declined to comment.
Meanwhile, two Michigan pension funds asked a Delaware court to stop JPMorgan’s takeover of Bear Stearns.
The funds are seeking a temporary restraining order blocking the sale of 95 million newly issued Bear Stearns shares to JPMorgan.
In court papers filed Tuesday, the pension funds argued that the stock sale, which would give JPMorgan a 39.5% stake in Bear Stearns before a shareholder vote on the takeover, was “designed to eviscerate the voting rights” of current stockholders.
The pension funds called JPMorgan’s $10-a-share sweetened offer for Bear Stearns “grossly inadequate.”
They also said the deal provisions effectively prevented any competing bid for the company.
JPMorgan declined to comment on the litigation. A Bear Stearns representative couldn’t be reached.