NY judge tosses lawsuits over Bear Stearns buyout

NEW YORK - A New York judge has dismissed shareholders' lawsuits contesting JPMorgan Chase & Co.'s fire sale buyout of Bear Stearns.

Manhattan Justice Herman Cahn says Bear Stearns officials tried to save some of the company's $1.5 billion value and avoid bankruptcy, which could have had "potentially cataclysmic consequences" for shareholders and the economy.

The lawsuits contend JPMorgan's offer of $10 a share was too low. JPMorgan Chase & Co. now owns 44.9 percent of Bear Stearns Cos.

The judge also said Bear Stearns' directors were protected from liability by the business judgment rule, which says company leaders who make decisions in good faith cannot be blamed if things go wrong as a result.

Cahn said bankruptcy might have left shareholders with nothing, adding: "The court should not, and will not, second guess" the directors' decisions.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.