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Resolution of Shareholder Interests

In March 2007, the controlling shareholder of Crowley Maritime offered $2,990 per share to buy out public investors, a price equal to 258% of the last traded price of shares when the Forum started in April 2004.

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Forum Report: Proceeding with Two Tactical Plans

(October 12, 2004)


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 reasonable proposal:

§        As 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.[1]

§        8,463 shares, constituting 9.48% of the common stock, are publicly reported in SEC filings to be held by two institutional investors[2] which have fiduciary responsibilities to consider any reasonable offer.

§        More than 7,000 shares of common stock, another 8% of the total, are believed to be held by four other fund managers[3] which have similar fiduciary and professional obligations to consider reasonable offers.

§        Substantial 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 steps:

1.     Establish 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 minority shareholders.

2.     Obtain 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.

3.     Based on the advice of legal counsel, define any claims to be asserted.

4.     Select a shareholder able to serve effectively as a representative plaintiff, acting on behalf of shareholder interests in the contemplated claims.

5.     Establish 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.

6.     Based on papers drafted by counsel and approved by the representative plaintiff, commence a lawsuit to protect shareholder interests.

7.     Submit 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.

Other issues

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


[1] Calculating the voting rights of the "Series A Junior Preferred Stock" and "Series N" common stock which were recently issued to the Crowley family, the publicly held common stock holdings appear to represent a net 23% of total voting rights.

[2] Franklin Resources reports holding 6,583 shares, and Everett Harris reports holding 1,880 shares.

[3] These are private fund managers which are not required to file SEC reports of their portfolio positions.




The Forum is open to all Crowley shareholders, whether institutional or individual, and to any fiduciaries or professionals concerned with their investment decisions.  Its purpose is to provide shareholders with access to information and a free exchange of views on issues relating to their evaluations of alternatives, as described in the Forum Summary.

There is no charge for participation.  As stated in the Conditions of Participation, participants are expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

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All material on this web site is published by Gary Lutin, who is responsible for conducting the Forum.