Dick Grasso may have been awarded a nifty $139.5 million by the New York Stock Exchange, but the problem facing new chairman John S Reed, who’s almost completed his job as interim chairman, is whether it will sue Grasso? Well? Will it?

Choosing whether to sue the former board members is the next order of business for the new directors after their surprise decision last week to hire John A. Thain, the president of the Goldman Sachs Group, to be chief executive of the exchange. Mr. Thain is now in the odd position of helping the Big Board find a permanent replacement for Mr. Grasso as chairman – in effect, recruiting his own boss. That could lead to criticism down the road. But for now, at least, the exchange has more pressing concerns.

In a 90-minute interview on Friday, Mr. Reed, 64, said that he and the other directors would make up their minds about the lawsuit in the next few weeks. To help them decide, they will examine an internal investigation of how the stock exchange board came to grant Mr. Grasso’s pay package.

“If you read this report and if you were trained in the law, you would say that there is information in that report that would support a potential legal action,” Mr. Reed said, leaning back in an armchair in the same office Mr. Grasso had occupied.

Such a suit would probably contend that former directors had been negligent in how they handled Mr. Grasso’s pay. It could be filed by the exchange’s current board; the Securities and Exchange Commission; Eliot Spitzer, the attorney general of New York; or some combination of the three, Mr. Reed said. Members of the exchange – its shareholders, in essence – could also sue if the board decided not to, he added.

Mr. Reed has referred to the contents of the report – compiled by Dan K. Webb, a former federal prosecutor – as “embarrassing.” Its findings were based on interviews with more than 60 executives, including Mr. Grasso, who were involved in the deliberations over the former chairman’s pay. The report could provide the first round of evidence in a potential suit.

The process of deciding whether to sue some or all members of the old board began in earnest on Friday, Mr. Reed said. He briefed the directors on the findings in the Webb report and planned to send copies of it to the directors this week.

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