Judge supports Gap family’s plan for bankrupt Pacific Lumber
By Malia Wollan
June 6, 2008
San Francisco, CA – A company owned by the founders of Gap Inc. won preliminary approval Friday to take over the bankrupt Pacific Lumber Co., which owns more than 200,000 acres of timberland along California’s North Coast.
A federal bankruptcy judge in Corpus Christi, Texas said in a ruling Friday that he would approve a reorganization plan by Mendocino Redwood Co., but the Ukiah-based company will be required make three changes to the plan.
Final approval of the takeover could be further delayed if creditors decide to appeal the ruling.
“This opinion is a positive step forward,” said Mendocino Redwoods Chairman Sandy Dean, adding that his company plans to make the changes requested by Judge Richard Schmidt.
Mendocino Redwood, a 10-year-old company largely owned by Gap founders Don and Doris Fisher, owns and manages about 230,000 acres of timberlands in Mendocino and Sonoma Counties.
Mendocino Redwood was one of five groups that submitted plans to take control of Pacific Lumber Co. after the Humboldt County timber firm filed for Chapter 11 bankruptcy protection in January 2007, saying it could no longer make a profit because of government logging restrictions.
Pacific Lumber is currently owned by Houston financier Charles Hurwitz and his Maxxam Corp., which acquired the Scotia-based company in 1986.
Mendocino Redwood’s plan has the support of Humboldt County residents, Pacific Lumber officials and environmental groups who have long objected to logging practices under Maxxam’s ownership.
“We are pleased with the ruling,” said Pacific Lumber CEO George O’Brien. “This ends a lot of uncertainty for our employees.”Posted in PALCO | Tagged HRC, MRC |