No Ivory Tower Dweller, he!

I mentioned last week that SCSF Equities, a private-equity firm based in Boca Raton, Florida, now says that it wants to replace three of the members of the board of directors of Furniture Brands, of St. Louis, MO.

I also said that I'd say something more about one of their nominees for director, Alan Schwartz, a professor at Yale Law.

Their motive in having him along for the ride is clear enough -- his name gives some academic luster to their cause. "It isn't just about money, it's about the principle of the thing -- best practices in corporate governance."

His motive? Is he associated in terms of his academic career with any theory that this proxy fight might in turn illuminate?

A quick google search using his name (complicated a bit by the fact that the president and chief executive of Bear Stearns is named Alan D. Schwartz) turned up this: a paper on "Sales and Elections as Methods of Transferring Corporate Control" that argues that the Delaware Supreme Court has been transforming the market for corporate control, making hostile takeovers by sale more difficult, pushing would-be acquirers toward elections -- towards, in other words, proxy fights.

In the meantime, the challenge slate has only this morning filed some "additional definitive proxy soliciting materials" with the SEC.

The gist of the new materials: this proxy fight is about getting enough control on the board to sell the company. SCSF, the fund behind the challenge, writes: "The Company’s current Board of Directors has been acting in the best interest of all shareholders. These concerns are underscored by Furniture Brands’ continued deterioration in financial performance and the fact that Sun Capital believes the Board has failed to appropriately consider at least two credible value creating proposals to acquire the Company."

So my guess looks good. It appears that the SCSF and its affiliates (collectively "Sun Capital") are serving as the inside cat's-paw for a would-be acquirer. And they have brought Alan Schwartz into the mix -- or he has come into it -- because he is the author of a theory to the effect that the Delaware court's are forcing acquirers to use such cat's paws on the inside.

See headline for this entry now.

Three quick notes

1. Japan's trade minister, Akira Amari, wants to block the London-based hedge fund TCI from buying up to 20% of the equity in the country's leading electricity wholesaler.

TCI now owns 9.9% of the company, known informally as J-Power, because 10% is the cap beyond which acquisitions in certain industries deemed essential to national security require government approval in that country.

Mr. Amari said he doesn't believe his stand should be taken as any indication that Japan is closing itself to foreign investment. "J-Power is involved in a nuclear power plant project and operates power lines linking Japan's four major islands; all these could affect public order and daily life."

2. The annual meeting of Motorola this year will come off early next month without a proxy fight, now that the company has patched things up with investor Carl Icahn.

Icahn's taken a beating on MOT's stock price of late. His SEC filings indicate he's paid an average of $14.41 a share for the 144.56 million shares of the company he owns. The market price at the close of business yesterday was $9.49. So let's break out the calculator. A loss of $4.92 in the value of each share, times 144.56 million? that adds up to a loss of more than 711 million. Pretty soon, even for Icahn, you'll be talking real money.

Of course, that's only a paper loss. Icahn now has representatives on the board, and he hopes to introduce changes that will turn around the recent price slide.

3. SCSF Equities, a private-equity firm based in Boca Raton, Florida, now says that it wants to replace three of the members of the board of directors of Furniture Brands, of St. Louis, MO.

Their three nominees are: T. Scott King; Ira Kaplan; Alan Schwartz. Mr. King is the managing director of Sun Capital Partners Inc., which is the parent company of SCSF. Ira Kaplan is the barely-retired CFO of Claire's Stores Inc. The surprise in this list, the one that makes me sit up and take notice, is Alan Schwartz.

Schwartz is a distinguished academic student of corporate governance. He's been a professor at Yale University since 1987 -- teaching both at the law school and at the management school there. What's he doing in this fight?

We may try to figure that out together next week, fellow spectators. See ya Sunday.