HP's Dunn is done with prosecutors?

According to a story in the San Jose Mercury, the California Attorney General's office is making an offer to former chairwoman of Hewlett-Packard Co. (NYSE: HPQ), Patricia Dunn (and others involved) to drop the felony charges to a misdemeanor.

Of course, last year, Dunn was in the middle of a firestorm because of her efforts to investigate HP's board. Apparently, the company hired various firms that used tactics like pretexting -- a way to get personal records by impersonating someone.

But it's never easy to prove criminal activity in the boardroom. After all, executives and board members rely on highly qualified (and highly paid) advisors.

True, a misdemeanor charge is much better than felony charges, which could mean jail time, but as for Dunn, she has ovarian cancer and may have nothing to lose -- but to fight it out.

Also, the fact that California is willing to be fairly lenient may be an indication that its case is so-so.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.