Is the recent buy out of Bear Sterns legal?

[rooster]

it is corporate socialism at its worst- people who owned the stock are looking into legal recourse to see if they can recoup the losses due to the "deal " -on the other hand JP chase group will contend that the price was headed to $0 due to the fact that the corp did not have enough liquid funds to cover operating costs and thus "saved" the company from its very near future demise

[David L]

I can not understand this because on Friday the stock was worth $30 and the people buy this stock with the understanding that it can and will go up and down by standard market forces. Which is fine by me and everyone else people understnad that it can sky rocket or can go down to zero! Fine, IF it does so by market forces.

Now all of the sudden (over the weekend no less! meaning the share holders had no say in the matter) without warning and because of something other than market forces and without any warning to the share holders it is worth only $2!

How can this be legal?

Also, don't the people who work there who have been or soon will be laid off have contracts? Is that legal to lay them off like that?