April 24, 2007
When Pacific Lumber filed for bankruptcy on January 18, it didn't surprise many people. In fact, forest and community activists had begun meeting to strategize for expected changes more than a year and a half ago after PL had been rather loudly and pointedly threatening bankruptcy to pressure regulatory agencies to give them more logging capability. A lot has happened since Jan. 18.
On the positive side, there are some indications that state officials will resist PL's manipulative moves to make even the bankruptcy work for those at the top of the corporation. PL's initial posturing with regards to tossing provisions of the Headwaters Deal Habitat Conservation Plan overboard have been rebuffed by comments from agency and elected officials, and the California Attorney General's office announced they want to move the bankruptcy proceedings, appropriately, to a California court. The only reason it is currently in a Texas court is because Maxxam "created" a bogus company--Scotia Development LLC--in June 2006 in order to have an office in Corpus Christi, Texas. The offices of this "company" occupy 344 square feet in an office building with an answering machine. Hurwitz's shenanigans continue to the end.
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The principal light at the end of the tunnel is the likely emergence of a company that will be Hurwitz-free and Maxxam-free. That is not guaranteed in bankruptcy proceedings, but it is inconceivable that the creditors and bondholders who will sit at the table overseen by the bankruptcy court could want management decisions to continue to be made by the corporate raider who took the company and the north coast economy down this path for the past two decades. But the outcome will be determined by debates, discussions and negotiations over the next year and a half or longer, as the court-facilitated corporate reorganization takes place. It is reorganization, not a shut-down, that is triggered by Chapter 11 corporate bankruptcy.
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TOC for Forest & River News, Spring 2007