Mendocino Humboldt Redwood Company, LLC
News

PALCO

Calif. Gov. Watching Pacific Lumber Case – Calif. Gov. Schwarzenegger Weighs in on Pacific Lumber Bankruptcy Case

By the Associated Press
January 30, 2008

WASHINGTON (AP) — California Gov. Arnold Schwarzenegger is weighing in on Pacific Lumber’s bankruptcy, calling it “an issue of paramount importance” and saying any plan to reorganize the company must ensure sustainable timber production.

“These lands and assets represent a unique public trust for the people of California,” Schwarzenegger wrote in a letter filed Tuesday with the U.S. Bankruptcy Court in Corpus Christi, Texas, which is overseeing the logging company’s bankruptcy case.

The governor’s letter comes as several parties in the case are expected to unveil competing proposals to take Pacific Lumber out of bankruptcy. The deadline for filing plans with the court is Wednesday.

Schwarzenegger didn’t support any specific plan, but he said any proposal should preserve Pacific Lumber’s more than 200,000 acres of timberlands by maintaining harvest levels that ensure “sustainable, high-quality timber production over the long term.”

The governor also said the plan should minimize impacts to the local economy in Humboldt County, where Pacific Lumber is based, and preserve as many jobs as possible.

“This is an issue of paramount importance to all Californians,” Schwarzenegger said about the bankruptcy reorganization. “On their behalf, I remain committed to ensuring that our interests are protected and the public trust secured.”

Pacific Lumber filed for bankruptcy protection in January 2007. It proposed a plan in September to fund its exit from Chapter 11 by developing 22,000 acres of timberlands for luxury homes and selling another 6,600 acres of old-growth redwood trees.

But the bankruptcy court ended the company’s exclusive control over the case, allowing others to develop their own plans. Its bankruptcy lender, Marathon Asset Management LLC, has said it’s willing to team up with California logging company Mendocino Redwood Co. LLC to help finance Pacific Lumber Co.’s bankruptcy plan.

Meanwhile, a group that includes the Nature Conservancy, Bank of America Corp. and Save-the-Redwoods League says it will offer a plan to put nearly 200,000 acres under a conservation easement that will allow sustainable timber production. The group would also set aside 12,000 acres as publicly protect wildlife areas.

Posted in PALCO | Tagged , |