SecProbe.io

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June 22, 2005

Via facsimile (310) 788-1200 and U.S. Mail

Didier Pietri
Chief Executive Officer
Vialta, Inc.
48461 Fremont Boulevard
Fremont, California 94538

Re:  	Vialta, Inc.
	Schedule 13E-3
      Filed on May 20, 2005
      File No. 5-61971
      Schedule 14A
      Filed on May 20, 2005
      File No. 0-32809

Dear Mr. Pietri:

      We have reviewed your filings and have the following
comments. Where indicated, we think you should revise your
documents in response to these comments.  If you disagree, we will
consider your explanation as to why our comment is inapplicable or
a revision is unnecessary.  Please be as detailed as necessary in
your explanation. In some of our comments, we may ask you to provide
us with supplemental information so we may better understand your
disclosure. After reviewing this information, we may or may not
raise additional comments.

      Please understand that the purpose of our review process is
to assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect of our review.  Feel free to call us at the telephone numbers
listed at the end of this letter.

Schedule 13E-3

1. Please revise to include all of the disclosure required by
Schedule 13E-3, as to each filer individually.  For example,
disclose the information required by Item 3 if Schedule 13E-3 for
Evershire XVI, L.P. and Everbright II, LLC.  In addition, to the
extent that they apply, please address the comments below as to
each filing person.

2. It does not appear that your financial statements contain all
of the information required by 1010(a)(3) and (4) regarding book
value and ratio of earnings to fixed charges.  Please to disclose
this information or otherwise advise.

3. It appears that you do not believe that pro forma financial
information pursuant to Item 13 of Schedule 13E-3 is applicable.
Please advise of your basis for not disclosing this financial
information as set forth in Item 1010 of Regulation M-A.

Schedule 14A

Summary Term Sheet, page 1

4. We note your statement in the second italicized paragraph
regarding the merger agreement that "[i]t is not intended to
provide any other information about [Vialta]" and that such
factual information "can be found elsewhere in this proxy statement
and in other public filings Vialta makes with the Securities and
Exchange Commission."  Investors are entitled to rely upon disclosures
in your publicly filed documents, including the merger agreement.
Please revise your disclosure to eliminate the language indicating that
stockholders may not rely upon the terms and conditions of the
merger agreement.

5. We note your disclosure in the last italicized paragraph on
page 1 that "the information concerning the subject matter of the
representations and warranties may have changed since the date of
the agreement, which subsequent information may or may not be fully
reflected in [Vialta`s] public disclosures."  To the extent the
disclosure in the merger agreement has changed or is no longer
accurate you have an obligation to revise your public disclosure.
Please revise as appropriate.

   Parties Involved in the Proposed Transaction, page 2

   	Participating Stockholders, page 2

6. Please revise to specifically name each filing person.  In
this regard we note that you refer to "trusts established for the
benefit of their children, and a related entity."

7. Here or in an appropriate place in the proxy statement,
disclose by percentage the interest of each participating
shareholder in the company after the merger.

   The Special Meeting, page 2

      Voting Agreement, page 2

8. You discuss the percentage of outstanding Vialta shares held by
participating stockholders and other affiliates of the company.
However, on page 3 under "Structure of the Transaction" you refer to
shares of Vialta held by "wholly-owned subsidiaries."  Indicate how
many shares are so held and how they may affect the vote on the
merger agreement.

The Merger, page 3

   	Certain Fraudulent Transfer Risks, page 4

9. In this Section, you disclose that Vialta shareholders who
receive cash in the merger may have to return that consideration if
"Vialta is insolvent at the time of the merger or becomes insolvent
because of the merger."  The potential to receive nothing in the merger
is a serious risk to shareholders, and their understanding of this risk
is critical to an informed voting decision.  Therefore, please expand
this section to disclose how "insolvency" is defined for purposes
of determining whether a fraudulent conveyance has occurred.  Also,
discuss what would occur if shareholders had to return the cash
they received. Would the entire transaction be unwound?  Finally,
clarify why a fraudulent conveyance risk exists.  It seems that the
distribution to public shareholders would not be the reason this
transaction might be deemed a fraudulent conveyance.  Is the
participation of affiliates the principal reason why this risk
exists? If so, please expand to explain.

10. Refer to our last comment above.  In your response letter,
please tell us what specific facts about this transaction led to the
disclosure regarding the risk of the merger being deemed a
fraudulent conveyance.  For example, has a creditor(s) objected to the
merger or do you anticipate that a creditor(s) may object?  This type
of disclosure is not typical in disclosure documents for going
private transactions, and we therefore want to understand (with a view
to possible additional disclosure) why this transaction in particular
poses a special risk of being deemed a fraudulent conveyance.

Federal Income Tax Consequences, page 4

11. Expand to discuss the federal income tax consequences of the
merger to participating stockholders and the company going
forward. See Item 1013(d) of Regulation M-A.

Appraisal and Dissenters` Rights, page 4

12. Briefly summarize the difference between dissenters` and
appraisal rights.

13. Please revise the last sentence in this section.  It is
confusing in that it implies that only shareholders who waive
dissenters` and appraisal rights will receive any cash consideration
as a result of this transaction.  As you know, shareholder who
exercise dissenters` or appraisal rights will receive some value for
their shares in Vialta, which may be equal to, greater than or less than
the merger consideration offered now.

14. Include the bold faced disclosure about the impact of voting
in favor of the merger that appears on page 43 in this section, as
well.

Fairness of the Merger; Conflicts of Interest, page 4

   	General

15. We note that in determining that the transaction is fair to
the unaffiliated security holders of Vialta, it appears that the
special committee, the board and the remaining filings persons adopted
Salem`s analysis and conclusions.  In light of the fact that the
fair value derived by Salem is of March 28, 2005, please disclose
whether the filings persons continue to believe that the transaction
is fair to the company`s unaffiliated security holders based on the
Salem`s conclusions and analysis.

Interests of certain Persons in the Merger, page 5

16. Specifically disclose that participating stockholders who will
own all of the company after the merger will be the only ones to
benefit from the performance of Vialta going forward.  If they may
take advantage of special tax advantages, such as tax loss carry
forwards, please describe.

The Merger Agreement, page 6

17. Briefly summarize the legal opinion that must be provided by
counsel to Vialta in order for the merger to be consummated.  That
is, what is the subject matter of the legal opinion?

Questions and Answers about the Merger, page 7

   General

18. It appears that your "Questions and Answers about the Merger"
section repeats a great deal of information from the summary term
sheet.  Combine these sections and eliminate the repetitive
disclosure.

   Can the board of directors consider other proposals?, page 10

19. In this section, disclose the termination fee payable to
Victory if the merger is not consummated.  Your disclosure should
clearly indicate that since Victory is owned by the participating
stockholders, they will receive the termination fee.

Special Factors, page 12
Structure of the Transaction, page 12

20. The disclosure here already appears earlier in the proxy
statement.  In addition, the mechanics of the merger, as opposed
to the reasons for the structure, its purpose and effects, is not
particularly critical disclosure.  Please revise to avoid
repeating the same information in different places in the disclosure
document, particularly that information that is not essential to an
understanding of the transaction.

   Background of the Merger, page 13

21. See the last comment above regarding the need to avoid
unnecessary repetition of non-critical information in the proxy
statement.  In this regard, the disclosure in the first two
paragraphs of this section appears verbatim earlier in the proxy
statement. Please revise.

22. Please better explain the financial situation of the company,
and in particular, any financial difficulties, so that investors may
understand why you are engaging in this transaction at this time.
In this regard, although you disclose Vialta`s losses over the past
several years, it is not clear to security holders what is driving
the timing of this merger.  See Item 1013 of Regulation M-A.

23. We note that at the meeting on March 30, 2004 the board
determined that a sale of the company would be preferable to a
reverse stock split.  Please revise to explain why.  Similarly, we
note that the board discussed other strategic alternatives, such
as continuing to operate the company as an ongoing business and
liquidating the company.  Please summarize the relative advantages
and costs of these alternatives and disclose why the board
determined that a sale of the company was the best alternative.  See
Item 1013 of Regulation M-A.

24. You disclose that Needham & Company was engaged to explore a
range of strategic alternatives for the board pursuant to a letter
agreement dated as of March 19, 2004 and provided a report on the
interest they had received relating to Vialta`s interest in
exploring strategic alternatives.  Please revise to summarize the
material terms of Needham`s relationship with Vialta.  See Item 1015 of
Regulation M-A.

25. Please expand your disclosure to summarize all reports
presented to the board by Needham.  See Item 1015 of Regulation M-A.
In this regard, note that Item 1015 of Regulation M-A encompasses both
oral and written reports that are materially related to this
transaction. Also, please file all written reports as exhibits to your
Schedule 13E-3.  See Item 1016(c) of Regulation M-A.

26. You disclose that Vialta entered into "stay bonus agreements"
with certain key employees, including Didier Pietri and William
Scharninghausen.  Please disclose all of the "key employees" that
received these bonuses and provide a materially complete
description of the "stay bonus agreements."

27. We refer you to the discussion of the initial estimated
preliminary liquidation value of Vialta determined by the board
and Needham on page 15.  In this regard, we note that there were
questions raised about the assumptions made in the liquidation
models and potential additional costs and that Vialta`s management
and Needham were aware that several assumptions may have caused the
estimated preliminary liquidation value to be underestimated.
Please revise to disclose the assumptions that were relied upon and
the assumptions that were underestimated in the original estimated
preliminary liquidation value.  Also, revise to disclose which
assumptions were readjusted or added in the revised analysis.

28. Refer to the third paragraph on page 15.  Explain why the
revisions to the liquidation value analysis and particularly the
underlying assumptions were deemed necessary and appropriate.
Also, explain who set those assumptions or requested that they be
changed. We note that the second liquidation analysis performed at
the request of the board of directors yielded a significantly lower
per share value than the first, so it is critical for shareholders to
understand the reasons for the change in value.

29. With respect to the $5 million dollar receivable written off
by the company, was that receivable owed by any affiliated party of
the company?  Please disclose if yes.  Also, discuss the circumstances
surrounding this note, and why its collection was deemed
uncertain.

30. See our last comment above.  We note that much of the
disclosure in this section focuses on the liquidation value of the
company assuming this receivable will be written off.  We also note
that the fairness opinion and the fairness analysis of this transaction
were conducted before this receivable was collected on April 28, 2005,
and that the merger agreement itself was similarly entered into when
collection was uncertain.  Given the significant sums collected by
the company through the note receivable, which were presumably not
reflected in the per share value ascribed to the shares at that
time, discuss what consideration was given to the updating the
analyses post-April 28, 2005.

31. Expand the third full paragraph on page 16 to specifically
describe the "concerns regarding the long term prospects of
Company A and the due diligence issues relating to the predecessor
business of its principals" expressed by the board that caused it to
reject an offer by an unaffiliated entity at a higher per share value
than that being paid in this merger.

32. Refer to the second to last paragraph on page 16.  What
reasons (if any) were provided by Company B as to why it no longer
wished to pursue a transaction with the company?  Also provide similar
disclosure for Company C.

33. Refer to the third full paragraph on page 18 of the proxy
statement.  Clarify what is meant by the "projected March 31, 2005
company position."  Disclose any material assumptions underlying
the projection.

34. In addition, summarize the "certain issues relating to the
current inventory of Vialta, its outstanding letters of credit and
its cash reserves" that were discussed at the February 23, 2005
meeting between Mr. Chan and the members of the special committee.

35. We note that the special committee and Mr. Chan agreed to an
aggregate transaction price of $30 million.  We also note that the
special committee and its legal counsel determined that it would
agree only to a purchase price expressed as a fixed price per
share and proposed a price of $0.36 per share.  Please disclose why
the special committee and its counsel would only accept a purchase
price expressed as a fixed per share price.

36. Please explain how the special committee derived the $0.36 per
share price.  Was the $0.36 per share price based on the initial
estimated preliminary liquidation value of Vialta?  If so, explain
why the special committee determined that the assumptions were
appropriate in this instance.

37. See our comment above regarding the need to clarify the
special committee`s request for a per share transaction value. It is
not clear from the discussion at the bottom of page 18 why it would be
difficult to determine a per share price "due to the unknown
impact of a number of stock options that had been issued to employees
of ESS Technology, Vialta`s former parent corporation."  Please expand
to explain specifically how the stock options impacted the per share
value of Mr. Chan`s offer for the company.  Is it because it was
not apparent how the options themselves would be treated in the
merger?

38. Refer to the disclosure in the first and second paragraphs on
page 19.  In the first paragraph, you st