At Bear, an Apology Is Met With Silence

DROPPING the curtain on 85 years of Wall Street history, shareholders of Bear Stearns voted Thursday to support the troubled investment bank’s controversial, government-backed merger with JPMorgan Chase.

The result, announced at a 10 a.m. meeting at Bear’s headquarters at 383 Madison Avenue, marked the end of Bear as an independent firm. But the outcome reflected less an embrace of the deal by bruised investors than the stark reality that the $10-a-share price was the best option available.

More than two months after the terms were struck in mid-March, Bear Stearns, which opened in 1923, is now part of JPMorgan. The tally in support of the merger was 84 percent, Bear Stearns said. The deal will close Friday at midnight.

Outside Bear’s glittering headquarters, now owned by JPMorgan, a carnival-like atmosphere — laden with gallows humor — prevailed. Former employees mingled in the street commiserating and scribbling comments on a large portrait of James E. Cayne, the former chief executive of Bear Stearns, whom many blame for the firm’s fall. Entrepreneurs hawked T-shirts with pictures of Mr. Cayne playing a violin on the 19th hole of a golf course.

Inside the building, however, the mood was somber, if not tearful — a stark contrast to the angry sentiments of Bear employees and shareholders in mid-March, most of whom felt that that Bear, known as the scrappiest firm on Wall Street, could have survived if it had been given earlier access to Federal reserves credit lines.

The new entity will be much leaner, reflecting the view of James S. Dimon, the chief executive officer of JPMorgan, that Wall Street will remain in a funk for some time. The deal bolsters JPMorgan’s commodities and energy operations and will give it a stronger foothold in the prime brokerage business if it regains the many customers who fled Bear Stearns.

But Bear’s balance sheet is rife with financial landmines, and with market conditions worsening, JPMorgan executives have cut hundreds of more jobs than they had anticipated. About 7,500 Bear Stearns bankers have lost their jobs, along with as many as 3,500 employees of JPMorgan.

Mr. Cayne, on his second to last day as chairman of Bear, presided over the meeting at the firm’s auditorium, which was filled with more than 400 employees. Sitting next to him was Alan D. Schwartz, Bear’s chief executive.

Mr. Cayne, who joined the firm in 1969 and lost more than $900 million in the firm’s collapse, had been conspicuously absent in March, when Mr. Dimon presided over a stormy meeting in the same location.

The gathering was very much a Bear Stearns affair, with Mr. Dimon in Italy meeting clients and no other top JPMorgan operating executives attending. Mr. Cayne’s presence was a powerful reminder to the Bear Stearns community that the fight was finished.

“I have no anger, only regret,” Mr. Cayne said, as he departed from the script of his prepared remarks. “Fourteen thousand families were affected. I personally apologize. I feel an enormous amount of pain and management feels an enormous amount of pain.”

The audience of Bear employees, directors and investors, many of whom Mr. Cayne has known for years and who lost large parts of their savings and fortunes, received his remarks in dead silence.

“That which does not kill you makes you stronger,” he added. “And at this point we are all like Hercules.”

Again, his words were met with silence.

“JPMorgan is a great organization,” he concluded. “There are better days ahead.”

And then the meeting, which lasted no more than 10 minutes, was over and Bear’s employees headed quietly off to work.