Just what exactly is J.P. Morgan Chase getting for its $10 per share acquisition of Bear Stearns?

It turns out that things weren't so bad, financially speaking, at the bank before February 29. Bear reported its first-quarter numbers in an S.E.C. filing yesterday, and, although income fell nearly 80 percent from the prior year, it still managed to eek out a profit of $115 million for the three-month period.

As for what happened during the days between February 29 and March 16, when J.P. Morgan announced its surprisingly low offer to save Bear Stearns from bankruptcy, we still don't know just how desperate things became. The filing gives few details: "The company experienced a significant liquidity crisis during the end of the week of March 10, 2008, that seriously jeopardized its financial viability."

Also on Portfolio.com: The Rescue of Bear Full coverage of the takeover.

We may find out a bit more tomorrow, as J.P. Morgan is scheduled to report its quarterly numbers before the market opens. While J.P. Morgan chief executive Jamie Dimon may not have much detail to report, it's all but certain he'll be asked about what Bear Stearns will bring to its balance sheet.  

One question that's on many minds now is whether or not J.P. Morgan will acquire Alan Schwartz with the deal. Schwartz, who was known as a preeminent dealmaker before he took the reins at Bear Stearns just 11 weeks before its fire sale, has not made his plans known yet.

But sources told Reuters that Schwartz will likely remain at J.P. Morgan as a "nonexecutive rainmaker" with the title of vice chairman. He would be responsible for bringing in high-level clients—such as Microsoft, which Schwartz is currently advising in its attempt to acquire Yahoo.

Schwartz wants to hold off on making a formal commitment to J.P. Morgan until after more of Bear's 14,000 employees learn their own fate, Reuters reports. J.P. Morgan already made it known that it will only invite five of Bear's top-26 investment bankers to join its ranks.
 
One thing we do know that J.P. Morgan will acquire with Bear is a growing legal mess. Bear announced in its filing that it has received a notice from the S.E.C. that it may be charged for its potentially anticompetitive practices in municipal-bond bids.

The filing also disclosed that the Federal Trade Commission is investigating whether or not Bear's mortgage-servicing unit violated consumer-protection laws.

And, of course, there's the slew of class actions and other suits related to Bear's credit problems and the events that led to its shotgun wedding with J.P. Morgan last month.

As for J.P. Morgan, analysts expect it to report a profit of 66 cents per share, and it will likely report more write-downs from troubled loans. Compared with many of its competitors on Wall Street, however, the expectations for loan losses are quite moderate.

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