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Schwarzenegger backs MRC plan for PALCO reorganization

The Eureka Reporter
April 4, 2008

Gov. Arnold Schwarzenegger announced Friday that he is supporting the reorganization plan proposed by Mendocino Redwood Company and Marathon Structured Finance Fund to lead the Pacific Lumber Co. out of bankruptcy.

The federal judge overseeing the Chapter 11 bankruptcy proceeding is scheduled to begin hearing testimony from the proponents of the five plans submitted during a hearing in Corpus Christi, Texas on Tuesday.

“My administration, through the California Resources Agency, the California Environmental Protection Agency and their boards and departments, has been active in the Pacific Lumber Company bankruptcy case,” Schwarzenegger stated. “We have an unwavering obligation to protect the environment and the state’s valuable natural resources.”

For the people of California and as a matter of public trust, Schwarzenegger stated the state has a significant commitment to safeguard the nearly $500 million investment that California and the federal government made in connection with the historic 1996 Headwaters Forest Agreement.

“The United States and the people of California have a vested interest in a successful reorganization of a Pacific Lumber Company that will result in sound management practices for the future of these lands,” Schwarzenegger stated in a news release.

Schwarzenegger said his decision is based on the five principles he put forth in his previous statement in Jan. 29.

Those include managing timberlands in accordance with state and federal laws, preserve the timberlands by ensuring sustainable, high-quality timber, minimizing adverse impacts to the local economy, preserve jobs and maximize greenhouse gas reductions.

In his statement, Schwarzenegger said the MRC/Marathon plan best satisfies his first and second identified principles – compliance with federal and state laws, permits and agreements – because it makes concrete pledges to abide by all environmental laws, existing permits and agreements.

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