(Communications Works logo)
Communication Works
FOR IMMEDIATE RELEASE May 10, 1999
Reporters: Call For Interviews With Metzenbaum or Mikva
CONTACT: Michael Shellenberger, Katrina Muniz, 415-255-1946
(cell: 415-398-4001)
Steelworkers: David Foster, Director, 612-623-8045 (cell:
612-710-1700)
Jon Youngdahl, cell: 612-810-8788; Rose Foundation: Scott Adams,
Tim Little, Jill Ratner, 510-658-0702
MAXXAM SHAREHOLDER GROUP TO BRIEF REPORTERS ON EFFORTS TO
IMPROVE CORPORATE GOVERNANCE AT MAXXAM
Who: Jill Ratner, Rose Foundation for Communities and
the Environment
Tom Van Dyck, As You Sow Foundation
Dave Foster, United Steelworkers of America
What: Press Conference
Where: Crowne Plaza Hotel: Houston Galleria
2222 West Loop South, Houston (tel. 713-961-7272)
When: 12:00 Noon, May 18 (Day Before Maxxam Shareholder
Meeting
The Committee of Concerned Maxxam Shareholders will brief
reporters about their campaign to elect two independent directors
to the Maxxam board and to improve corporate governance at the
company.
The Committee's proxy materials note that Maxxam recorded a net
loss of $57.2 million for 1998. Business Week named Maxxam's
board the 10th worst in the list of "The Worst Boards of
Directors" and called it a "tiny board with little business
experience dominated by CEO" Charles Hurwitz (Dec. 8, 1997).
Apart from performance issues, the proxy materials also cite
several factors that, in the Committee's opinion, demonstrate a
need for independent directors and corporate reform.
The briefing will take place on May 18, one day before Maxxam's
annual meeting, which is scheduled to begin at 8:30 AM on
Wednesday, May 19, 1999 at the Waterwood National Resort and
Conference Center in Huntsville, Texas.
The Committee is urging holders of Maxxam common stock to elect
former U.S. Senator Howard Metzenbaum and former federal Judge
Abner Mikva to the two board seats filled by owners of common
stock. The other three seats on Maxxam's board are chosen by the
common and preferred shareholders voting together, with preferred
shares outvoting common shares 10 to one.
Participating in the press briefing on behalf of The Committee of
Concerned Maxxam Shareholders are Tim Little and Jill Ratner of
the Rose Foundation, and David Foster of the United Steelworkers
of America. Also participating is Tom Van Dyck of the As You Sow
Foundation, which is sponsoring one of the two shareholders
resolutions, but is not a Committee member. In proxy materials
circulated to Maxxam shareholders, the Committee explains why it
believes that Maxxam needs independent directors and governance
reforms.
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* "Specifically, allegations of fiduciary lapses have surrounded
Maxxam's CEO and Chairman, Charles Hurwitz. In April 1997, the
Delaware Court of Chancery ruled in a case brought by minority
Maxxam shareholders that Mr. Hurwitz had engaged in self-dealing
with loans that were not found fair to the Company . . . . In
addition, Maxxam faces potential liabilities in two separate
legal proceedings based on the failure and subsequent $1.6
billion bailout of United Savings Association of Texas, a savings
and loan association that Maxxam is alleged to have controlled. .
. . These suits and related litigation have already been costly
to the Company, which has paid approximately $40,000,000 in
litigation expenses, including Mr. Hurwitz's expenses."
* "In 1997 and 1998 the California Department of Forestry and
Fire Prevention ("CDF") suspended the timber operator license of
Maxxam's Pacific Lumber subsidiary twice in a twelve month
period, based on 128 cited violations of state forest practice
rules. The most recent license suspension lasted over three
months."
* "Maxxam's Kaiser Aluminum Corporation ('Kaiser'), 63% of whose
outstanding common stock is held by Maxxam, is embroiled in a
serious labor dispute, the longest in Kaiser's history. The
Committee believes that this dispute and the associated costs
were avoidable . . . If the NLRB [National Labor Relations
Board] does decide to file a complaint, such a complaint could
allege that KACC [Kaiser Aluminum Chemical Corporation] engaged
in an illegal lockout. That contention, if established, could
result in gross back pay liability of up to $3 million per week
from January 14, 1999."
* KACC reported losses of $50 million in the fourth quarter of
1998 owing to the strike, and Kaiser reported a net loss of $38.9
million in that quarter."
* "In addition, serious accident rates and worker compensation
claims increased at KACC since the strike began. According to
the Occupational Health and Safety Administration ("OSHA") safety
logs, serious workplace injuries increased 138 percent in the
fourth quarter of 1998 over the average of KACC during the first
three quarters of 1998 prior to the labor dispute."
* In addition, both Kaiser and Pacific Lumber have experienced
tragic fatalities that the Committee believes could have been
prevented. In October 1997, a 33 year old Kaiser mechanic died
when he was crushed beneath the bucket of a front-end loader he
was repairing. The Washington State Department of Labor and
Industries found Kaiser at fault in the incident, cited Kaiser
for five safety violations, and fined it $35,000. In September
1998, a Pacific Lumber employee logged a tree into a group of
protesters, killing a 24 year old man. Attorneys for the young
man's family have publicly announced that they expect the logging
incident to be the subject of a lawsuit seeking damages."
The following may be deemed to be "participants" in this
solicitation: The Rose Foundation for Communities and the
Environment, which owns 50 shares of Maxxam common stock; Jill
Ratner and Thomas W. Little, who own 90 shares of Maxxam common
stock as tenants in common; the United Steelworkers of America,
which owns 1002 shares of Maxxam common stock; As You Sow
Foundation, which owns 100 shares of Maxxam common stock; Howard
M. Metzenbaum, who does not own Maxxam stock; and Abner J. Mikva,
who owns 50 shares of Maxxam common stock. The foregoing (except
the As You Sow Foundation) constitute the members of The
Committee of Concerned Shareholders and the two nominees for
Maxxam common director.
Michael Shellenberger, Director
Communication Works
tel: 415-255-1946, fax: 415-255-1947
http://www.communicationworks.org
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