To MGP2006 colleagues:

Does -- or should -- the law allow Dow Jones & Co. directors to consider the public interest as they weigh whether to sell to News Corp.? I'm looking for guidance and advice on this point. Can you help?

A June 21 article by Los Angeles Times writer Joseph Menn quoted Charles Elson, director of the University of Delaware's Weinberg Center for Corporate Governance, as saying that if the directors decide to sell the company, their legal obligation is to get the highest possible price. The law in Massachusetts at least -- where Dow Jones owns small dailies -- appears to allow other factors to be considered.

Massachusetts General Laws Chapter 156B, Section 65, reads:

"In determining what he reasonably believes to be in the best interest of the corporation, a director may consider the interests of the employees, suppliers, creditors, and customers, the economy of the state, regions and nation, community and societal considerations, and long-term and short-term inerests of the corporation and its stockholders, including the possibility that these interests may best be served by continued independence of the corporation."

My father, a retired corporate executive, and I have written a letter to Michael B. Elefante, of the Boston law firm of Hemenway and Barnes, trustee for a block of Bancroft family shares, noting this. What other precedents exist?

What about just arranging a buyer for any of the Bancroft offspring who want to cash out? One could arrange to sell them a put right that would give them downside protection -- and they could borrow money against that, if they want cash, so long as the borrowing is secured by the person that gave them the put right. Does that make sense?

Example: Say I'm a Bancroft offspring. I have one share. Someone comes to me and says: "I promise I'll buy your shares at anytime over the next 10 years that you want to sell them, for $30 a share. You ***also*** have to
agree to sell them to me, at $30 a share, whenever I want to buy them, so long as you have the legal right to sell them. Now that Bancroft offspring can go borrow against that agreement, so long as the offerer's credit is accepted by the lending institution. This gives the offerer the upside potential and the Bancroft family member the downside protection -- and liquidity.

-- Bill Densmore / densmore at newshare dot com / 413-458-8001 http://newshare.typepad.com/about.html