Three brief items

1. What is the "ethernet"?

A couple of entries ago, I described MRV Communications as a "networking/ethernet company." What does that mean? Networking is the broader term. All computer operating systems nowadays are "networking," i.e. they all support internet protocol at a minimum. "Ethernet" is a more specific term, referring to a particular local-area network (LAN) architecture.

2. General Growth Properties

GGP, the mall operator and a Delaware chartered corporation, remains in bankruptcy court, where it has been since its filing in April, in the Manhattan bankruptcy court.

The case is shaking up ideas about special purpose entities and what is or isn't bankruptcy remote. Walter Kurtz writes that "structurers are quickly moving away from Delaware" as a result of developments in this litigation, and that the Caymans will be their new charterer of choice.

3. Dell offers $3.9 billion for Perot Systems.

Analysts who cover Dell have long said that it was too tightly focused on hardware and should diversify into the software side of the industry. This it now appears intent on doing, by purchasing a company founded by a former independent presidential candidate.

Perot, I'm told, is a juicy target because it has contracts with hospital groups, and any reform of the healthcare system that does come out of this or ensuing Congresses will almost surely include a push to digitize healthcare, which of course means work for Perot. I'll try not to wax conspiratorial here, or even to mutter about crony capitalism.

MRV Communications

A networking/ethernet company based in California, MRV Communications Inc., has reported some good news to its stockholders in recent days. The staff of the SEC has completed its investigation of MRV's stock option granst and practices and has decided not to recommend any enforcement action.

Yet MRV continues to face the prospect of a proxy fight at its upcoming annual meeting. Dissident shareholders including Spencer Capital
Opportunity Fund LP, and Boston Avenue Capital LLC have indicated they plan to wage a proxy contest to replace the entire board.

The board, in a letter to shareholders, has characterized the dissidents as a group of Johnny-come-latelies with no long-term interest in the company. "The dissidents collectively own approximately 1.2% of the Company`s outstanding shares, which they only began acquiring in July of this year."

But it assures the stockholders, or the other 98.8% of them: "We are always interested in the views of our stockholders and, in fact, we tried
to reach out to this group on a number of occasions to better understand their
objectives and share our plans with them as to MRV`s future. To date, they have
refused to engage in a dialogue with us about their ideas or objectives and have
refused our invitation to consider some of their candidates in our director
search. What we believe to be true about the dissident group is that they are
trying to gain control of MRV without offering stockholders any premium for
their investment."