Bear Stearns investors withdraw injunction request

NEW YORK (Reuters) - Bear Stearns Cos Inc shareholders suing over the planned JPMorgan Chase & Co. takeover have withdrawn a request for a preliminary injunction to stop the deal, an attorney for the plaintiffs said on Wednesday.

The plaintiffs' lawsuit in New York State Supreme Court will go forward, although it will now focus on trying to get monetary damages on behalf of Bear Stearns shareholders, said Daniel Krasner, a senior partner at law firm Wolf Haldenstein Adler Freeman & Herz LLP.

He said that based on preliminary estimates, plaintiffs could seek damage claims of at least $2.8 billion in the lawsuit. JPMorgan is offering $10 a share for Bear Stearns shares, which Krasner said should be valued at a minimum of $30 each.

After evaluating the case, "We think it's in the best interests of the Bear stockholders to let the transaction proceed and sue for damages," Krasner told Reuters. "We think that monetary recovery is all that is really available to the Bear stockholders at the end of the day."

A Bear Stearns spokesman was not immediately available for comment.

A court hearing had been scheduled for Thursday on the preliminary injunction request, which had sought to prevent JPMorgan from voting its newly acquired stake of 39.5 percent of Bear Stearns shares.

A pretrial conference will be held at that time instead, according to a letter sent on Tuesday to New York State Supreme Court Justice Herman Cahn, who is overseeing the case.

A group of investors, including individuals and institutions, such as the Louisiana Municipal Police Employees' Retirement System, are plaintiffs in the case. They said Bear Stearns' board of directors violated its fiduciary duties to shareholders in agreeing to the JPMorgan deal.

JPMorgan initially agreed to buy Bear Stearns for $2 per share as the investment bank verged on collapse, following concern that the company did not have enough capital to keep going after being hard hit by the mortgage market crisis and credit crunch. The offer was later raised to $10 a share.