It will be small comfort to the firm's new owner that Bear Stearns will not be alone. In 2007, plaintiffs filed 278 federal lawsuits related to subprime mortgage-backed securities, according to Navigant Consulting. Navigant predicts that the subprime-litigation wave will eclipse the record litigation that followed the savings and loan crisis in the late 1980s and early 1990s.

Securities-fraud class actions will not be the only legal headache for Bear Stearns and J.P. Morgan. Lawyers involved in the deal said they are also expecting a lawsuit challenging the deal itself. Law firms are already trolling for shareholders to sign on to such a lawsuit.

Bear Stearns' board is particularly vulnerable. In reviewing this deal, it was put in a very difficult spot: The Fed was looking to stanch a market panic—it wanted systemic relief. But the board's fiduciary duties begin and end with the interests of its own shareholders.

To help it navigate this thicket, the board hired H. Rodgin Cohen, chairman of Sullivan & Cromwell and the dean of the banking mergers and acquisitions bar, to advise it. Cohen has worked previously on major regulatory issues for Bear Stearns, and has represented some members of the board of directors in the past.

Cohen has worked on virtually every major bank deal for the past two decades—and has also participated in the resolution of bank failures, among them Continental Illinois and Bank of New England.

Cohen worked alongside two longtime advisers to Bears Stearns—Peter Atkins, a takeover specialist at Skadden Arps Slate Meagher & Flom, and Dennis J. Block of Cadwalader Wickersham & Taft, a mergers lawyer who has also handled a lot of securities litigation for Bear Stearns.

Bear Stearns' financial adviser, Lazard, has hired even more legal firepower. It turned to Cravath Swaine & Moore partners Erik R. Tavzel, James C. Woolery, and Richard Levin, a restructuring specialist.

J.P. Morgan Chase, meanwhile, hired Edward Herlihy of Wachtell Lipton Rosen & Katz, another giant in the banking mergers and acquisitions bar.

In the end, these lawyers helped the Bear Stearns board weigh two options: bankruptcy, or the deal on the table with J.P. Morgan. Bankruptcy was considered a "total disaster," according to another lawyer with knowledge of the deal. It would have meant casting 14,000 people out of work, and put their retirement savings and pensions at risk.

Several bankruptcy lawyers, who declined to speak on the record because of client relationships with either financial institution, agreed that there was little upside to a Bear Stearns bankruptcy.

The parent company is eligible to file for Chapter 11 reorganization, but many of its businesses are registered-stockholder businesses, which would face Chapter 7 liquidation and sale. "It has no great allure or utility," said one bankruptcy lawyer.

Another said that a Bear Stearns bankruptcy filing would be one of the most complicated and expensive in history. "There are so many transactions, it boggles the mind," this lawyers said.

A third pointed out a bankruptcy filing would not stay or put on hold many of Bear Stearns' outstanding loans, including deals known as "repos" and swaps, because the bankruptcy laws do not allow that.

Even so, there are arguments that bankruptcy could benefit Bear Stearns. It would allow the company to sell its collateral in an orderly way, rather than in a panic. But that would take at least 18 months. And, as one bankruptcy lawyer put it, shareholders could argue that "fear mongering" drove down the price of what would otherwise have been considered more solid assets.

A shareholder vote on the deal is slated for June. Expect more action in court before then.