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Last week, as shareholders for Bear Stearns threatened action over JPMorgan’s $2-per-share offer, the Federal Reserve Bank of New York quietly called on Simpson Thacher & Bartlett to represent its interests, according to a source close to the deal. Apparently Simpson’s lawyers were brought on to represent the Fed in a role it disclosed in a statement today. Through an LLC set up just for this deal, “the New York Fed will take . . . control of a portfolio of assets valued at $30 billion as of March 14, 2008,” the statement read. It continued, “the assets will be pledged as security for $29 billion in term financing from the New York Fed at its primary credit rate.” Simpson Thacher had no comment and a spokesperson for the New York Fed could not be reached for comment. The law firm finds itself on one of the most high-profile matters in the financial world, despite the fact that it is not representing longtime client and Bear Stearns acquiror JPMorgan. [See "Wachtell in for JPMorgan on Bear Stearns Deal".] Today, after reported misgivings about the merger contract and the price, JPMorgan increased its offer to $10 per share.

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