Proceeding with Two Tactical Plans
Responses of Crowley Maritime shareholders to the
September 16, 2004 Forum Report support proceeding simultaneously with
tactical plans for two of the suggested alternatives, to explore (1)
potential transactions with a strategic relationship and (2) possible legal
actions to enforce the rights of minority shareholders. Separate advisory
panels or “workshops” will be developed for Forum participants interested in
guiding the definition of issues to be addressed in each of the two
projects, as indicated below.
Tactical Plan #1: Transaction with a strategic relationship
The potential benefits of a transaction with a strategic relationship were
widely appreciated, but a question was raised about the availability of a
critical 10% position in Crowley Maritime’s voting common stock. As Forum
participants will recall from recent reports, a
September 24, 2004 news article cited claims of unidentified sources
that the holdings of family members and “loyal employees” would prevent the
10% accumulation. The company’s management was encouraged to correct this
confusion in a
September 27, 2004 letter, but they have not done so. The following
information is therefore provided to allow anyone – including Forum
participants as well as prospective strategic relationships – to estimate
what portion of Crowley common stock might be available in response to a
reported in the company's
most recent proxy statement, filed April 19, 2004, directors and
officers together with family members controlled only 62,597 of the total
89,249 shares of voting common stock, leaving the remaining 26,652 shares,
approximately 30%, in public hands.
shares, constituting 9.48% of the common stock, are publicly reported in SEC
filings to be held by two institutional investors
which have fiduciary responsibilities to consider any reasonable offer.
than 7,000 shares of common stock, another 8% of the total, are believed to
be held by four other fund managers
which have similar fiduciary and professional obligations to consider
additional holdings are controlled by family members who have openly
expressed their independence of Crowley Maritime’s management and
controlling shareholder, including at annual meetings.
It can be assumed, under these circumstances, that a serious proposal would
be considered on the basis of its investment merits by holders of more than
double the required 10% of common stock. There is no reason to expect any
of the professional fund managers or “outside” family members to ignore
economic interests in favor of loyalty to current Crowley management.
The views of Forum participants will be welcomed to guide the definition of
issues to be addressed, in relation to either the terms of a transaction or
the investment characteristics of any company offering its securities in
exchange for Crowley stock. It should be understood, of course, that these
explorations must be conducted privately to avoid compromising the interests
of either a shareholder or a prospective strategic relationship. Specific
communication protocols will be developed to accommodate the particular
interests of Forum participants who wish to be involved in the process or to
be kept informed of progress.
Tactical Plan #2: Actions to enforce rights of minority shareholders
Several Forum participants expressed a belief that enforcing shareholder
rights is critical to a realization of their investment’s fair value, and
more than one Crowley shareholder expressed a willingness to consider
serving as a representative plaintiff if litigation is appropriate.
Forum participants are encouraged to help guide the exploration of legal
issues and any resulting litigation. At this stage, I will appreciate your
suggestions of claims to be investigated as well as attorneys to be
considered for engagement. The process is likely to involve the following
a “short list” of law firms experienced in shareholder rights litigation and
specifically familiar with fiduciary breach of duty claims, and then select
the attorney best suited to represent the interests of Crowley Maritime’s
the information needed to consider possible claims, if necessary through
records demands under
Section 1601 of the California Corporations Code or
Section 220 of the Delaware General Corporation Law.
on the advice of legal counsel, define any claims to be asserted.
a shareholder able to serve effectively as a representative plaintiff,
acting on behalf of shareholder interests in the contemplated claims.
a litigation advisory panel of interested shareholders to provide a range of
investor views for the representative plaintiff to consider in his decisions
about the conduct or disposition of the contemplated lawsuit.
on papers drafted by counsel and approved by the representative plaintiff,
commence a lawsuit to protect shareholder interests.
a shareholder proposal to be presented in the company’s next proxy statement
for stockholders to determine, according to
Section 145(d)(4) of the Delaware General Corporation Law, whether each
director defendant met the standards of conduct required for corporate
indemnification in relation to the lawsuit’s claims.
The Forum will of course continue to address other interests of its
participants. Your advice of issues that may concern Crowley Maritime’s
investors will always be appreciated.
GL -- October 12, 2004