12/18/03 A BUYOUT OF PL? It's nothing more than talk, at this point. But environmental activists and others are looking into the feasibility -- or lack thereof -- of what might be called the ultimate solution: Buying the Pacific Lumber Co. Jan Kraepelien, formerly of KEET-TV and long involved in the never-ending local timber wars, confirmed Tuesday that he had broached the idea with the Redwood Forest Foundation, a Mendocino County non-profit that uses tax-exempt bonds to purchase industrial timberlands. (The group was involved in the unsuccessful effort to purchase commercial timberlands in the Mendocino region owned by Louisiana-Pacific; the company sold its holdings instead to the Gap.) Kathy Moxon, chief administrative officer of the Humboldt Area Foundation, and a member of RFF's board of directors, said that so far she hasn't done much more than put out some feelers to other board members to gauge their level of interest. Stay tuned.
Note: Jan Kraepelien was a board member of "Humboldt Watershed Council" according to tax filings. Years T/K
Showing posts with label PL Bankruptcy. Show all posts
Showing posts with label PL Bankruptcy. Show all posts
3.29.2008
12.17.2007
HC - Dec. 14, 2007 Pacific Lumber Bondholders Denied Bid
Dec. 14, 2007, 4:43PM
Pacific Lumber Bondholders Denied Bid
WASHINGTON — A federal appeals court has shot down a bid by a group of Pacific Lumber Co. bondholders to split off a unit from the company's Chapter 11 case so they could try to seize 200,000 acres of timberland in Northern California.
The 5th U.S. Circuit Court of Appeals Thursday said Pacific Lumber's Scotia Pacific unit doesn't meet the Bankruptcy Code's definition of a "single-asset real estate company" because it conducts "substantial" business other than the operation of real estate.
The court's decision, which affirms an April ruling from the U.S. Bankruptcy Court in Corpus Christi, Texas, means Scotia Pacific, or Scopac, can remain part of Pacific Lumber's Chapter 11 case and won't be subject to a shorter bankruptcy timeline.
Pacific Lumber, based in Scotia, Calif., created Scopac in 1998 as a standalone entity to issue $867.2 million in bonds. Pacific Lumber also transferred 210,000 acres of timberlands located in Humboldt County, Calif., to Scopac as collateral for the bonds. Both companies are subsidiaries of Houston-based conglomerate Maxxam Inc., which is owned by Texas tycoon Charles E. Hurwitz.
The bondholders had argued that Scopac was a single-asset real estate company, which would have put its Chapter 11 case on a fast-track to emergence. Bankruptcy law treats companies that use real estate to operate a business differently than those that use property simply for income.
The bondholders' group _ over a dozen hedge funds and Wall Street investment banks owed more than $700 million _ had sought single-asset status to gain leverage in negotiations with the company. A lawyer for the group had said the bondholders were interested in taking over the California timberlands.
The appeals court, however, said Scotia Pacific performs its business on the real estate for the purpose of selling timber _ not the underlying real estate.
"We agree with the bankruptcy court's holding that Scopac conducts substantial business other than operating the real property and activities incidental thereto," the court said. "Scopac's timberland is clearly more than a passive investment."
The court said categorizing Scotia Pacific as a single-asset debtor would "sweep broadly and require us to include such entities as owners of land or mineral interests who operate sophisticated businesses such as mining, oil and gas drilling, and large commercial farms simply by virtue of the debtor owning the land."
Pacific Lumber, which has been logging in Northern California for more than 130 years, filed for Chapter 11 protection in January along with Scotia Pacific and four other Maxxam-owned timber businesses after failing to make a $27 million interest payment to bondholders.
By MARIE BEAUDETTE
© 2007 The Associated Press
Pacific Lumber Bondholders Denied Bid
WASHINGTON — A federal appeals court has shot down a bid by a group of Pacific Lumber Co. bondholders to split off a unit from the company's Chapter 11 case so they could try to seize 200,000 acres of timberland in Northern California.
The 5th U.S. Circuit Court of Appeals Thursday said Pacific Lumber's Scotia Pacific unit doesn't meet the Bankruptcy Code's definition of a "single-asset real estate company" because it conducts "substantial" business other than the operation of real estate.
The court's decision, which affirms an April ruling from the U.S. Bankruptcy Court in Corpus Christi, Texas, means Scotia Pacific, or Scopac, can remain part of Pacific Lumber's Chapter 11 case and won't be subject to a shorter bankruptcy timeline.
Pacific Lumber, based in Scotia, Calif., created Scopac in 1998 as a standalone entity to issue $867.2 million in bonds. Pacific Lumber also transferred 210,000 acres of timberlands located in Humboldt County, Calif., to Scopac as collateral for the bonds. Both companies are subsidiaries of Houston-based conglomerate Maxxam Inc., which is owned by Texas tycoon Charles E. Hurwitz.
The bondholders had argued that Scopac was a single-asset real estate company, which would have put its Chapter 11 case on a fast-track to emergence. Bankruptcy law treats companies that use real estate to operate a business differently than those that use property simply for income.
The bondholders' group _ over a dozen hedge funds and Wall Street investment banks owed more than $700 million _ had sought single-asset status to gain leverage in negotiations with the company. A lawyer for the group had said the bondholders were interested in taking over the California timberlands.
The appeals court, however, said Scotia Pacific performs its business on the real estate for the purpose of selling timber _ not the underlying real estate.
"We agree with the bankruptcy court's holding that Scopac conducts substantial business other than operating the real property and activities incidental thereto," the court said. "Scopac's timberland is clearly more than a passive investment."
The court said categorizing Scotia Pacific as a single-asset debtor would "sweep broadly and require us to include such entities as owners of land or mineral interests who operate sophisticated businesses such as mining, oil and gas drilling, and large commercial farms simply by virtue of the debtor owning the land."
Pacific Lumber, which has been logging in Northern California for more than 130 years, filed for Chapter 11 protection in January along with Scotia Pacific and four other Maxxam-owned timber businesses after failing to make a $27 million interest payment to bondholders.
By MARIE BEAUDETTE
© 2007 The Associated Press
11.03.2007
The Points in the HumCPR ad
Here's what the ad says -
By enacting an "Emergency Ordinance" that bans new home construction on TPZ lands in Humboldt County, you have abused your power and attacked our rural culture.
You claimed an "emergency" as a ruse to cheat us out of our constitutional right to due process, and you took over $1 Billion of property without justification or compensation.
You held two public hearings with little or no advance notice where you rushed to eliminate a long-standing right to build a home on private property.
You interfered with the dream of home ownership for many individuals who were in the process of achieving a piece of Humboldt County's rural culture. You are ignoring the county and state laws that for 30 years have allowed a residence on TPZ lands.
You have pre-determined the outcome of the ongoing General Plan Update process by dictating a policy that eliminates home building on TPZ lands.
You claimed the ordinance is in response to an "emergency." There is no emergency. Nobody can build a home on TPZ lands without your building permit oversight and regulation - and you know that to be true. You were already in control of the process.
By enacting an "Emergency Ordinance" that bans new home construction on TPZ lands in Humboldt County, you have abused your power and attacked our rural culture.
You claimed an "emergency" as a ruse to cheat us out of our constitutional right to due process, and you took over $1 Billion of property without justification or compensation.
You held two public hearings with little or no advance notice where you rushed to eliminate a long-standing right to build a home on private property.
You interfered with the dream of home ownership for many individuals who were in the process of achieving a piece of Humboldt County's rural culture. You are ignoring the county and state laws that for 30 years have allowed a residence on TPZ lands.
You have pre-determined the outcome of the ongoing General Plan Update process by dictating a policy that eliminates home building on TPZ lands.
You claimed the ordinance is in response to an "emergency." There is no emergency. Nobody can build a home on TPZ lands without your building permit oversight and regulation - and you know that to be true. You were already in control of the process.
10.03.2007
the hue and cry
Shellenberger, Ken Miller and Mark Lovelace have won. The environmental community has won. They drove the company to its knees, and went in for the jugular. They used the laws and the courts as panzer units, very effectively. They stand waiting in the wings to seize full advantage and put forth their own "Transition Mission." What does it mean to you? You won't be building any redwood decks and fences. Trex, and plastic will be all you can find.
Those of us who have lived here a long time have always knows that the timber lands would unlimately become subdivisions. It is no surprise. It was especially clear after the timber wars started. No company could survive the ongoing harrassment - justified or not - and some of it was justified. But at some point, a line was crossed. Headwaters may have been that point.
Google News Alert for: "Pacific lumber"
PalCo Bankruptcy Plan; Maxxam Sells Redwoods to Developers Bay Area Indymedia - San Francisco,CA,USA
At Pacific Lumber's Chapter 11 bankruptcy hearings, parent corporation Maxxam (Houston, TX headquarters) submits plan in Corpus Christi court to sell land ...
Lumber company wants to sell 29000 acres redwoods in NorCal
San Jose Mercury News - CA, USA
Pacific Lumber Co. has asked a US Bankruptcy Court in Texas for permission to sell nearly 29000 acres of Northern California redwood forest and to continue ...
Google Blogs Alert for: "Pacific lumber"
HH: The Evil Charles Hurwitz / Rodent America nnc
By Jshields
PACIFIC LUMBER REORGANIZATION PLAN WOULD SELL, DEVELOP AND LOG LAND The long-awaited corporate reorganization plan that Pacific Lumber must, by law, submit to the bankruptcy court under Chapter 11 bankruptcy proceedings ...
PACIFIC LUMBER BANKRUPTCY REORGANIZATION PLAN WOULD SELL, DEVELOP ...
By Rex Frankel(Rex Frankel)
The long-awaited corporate reorganization plan that Pacific Lumber must, by law, submit to the bankruptcy court under Chapter 11 bankruptcy proceedings is out, after two extensions. Under bankruptcy law, the debtor (PL) gets the first ...
238 - Earth Tree News
By olyecology(olyecology)
Pacific Lumber's Michael Claes said there are three main elements to the plan, which puts the value of its holdings at about $1.4 billion. The deal would include: 1) Selling 6600 acres of ancient redwood groves for $300 million, ...
The unending battle
By Rose(Rose)
The heart of the Humboldt County Watershed Council's allegations comes in Herman's present affiliations with the Pacific Lumber Co. As a private attorney, according to the council, Herman represents the Scotia-based lumber company -- an ...
Pacific Lumber looking to sell
Dan Lyke: Pacific Lumber asking bankruptcy judge to be allowed to sell 29000 acres of northern California redwood forest. You may remember Pacific Lumber as the company that was "overvalued" as a long-term responsible steward of its ...
Those of us who have lived here a long time have always knows that the timber lands would unlimately become subdivisions. It is no surprise. It was especially clear after the timber wars started. No company could survive the ongoing harrassment - justified or not - and some of it was justified. But at some point, a line was crossed. Headwaters may have been that point.
Google News Alert for: "Pacific lumber"
PalCo Bankruptcy Plan; Maxxam Sells Redwoods to Developers Bay Area Indymedia - San Francisco,CA,USA
At Pacific Lumber's Chapter 11 bankruptcy hearings, parent corporation Maxxam (Houston, TX headquarters) submits plan in Corpus Christi court to sell land ...
Lumber company wants to sell 29000 acres redwoods in NorCal
San Jose Mercury News - CA, USA
Pacific Lumber Co. has asked a US Bankruptcy Court in Texas for permission to sell nearly 29000 acres of Northern California redwood forest and to continue ...
Google Blogs Alert for: "Pacific lumber"
HH: The Evil Charles Hurwitz / Rodent America nnc
By Jshields
PACIFIC LUMBER REORGANIZATION PLAN WOULD SELL, DEVELOP AND LOG LAND The long-awaited corporate reorganization plan that Pacific Lumber must, by law, submit to the bankruptcy court under Chapter 11 bankruptcy proceedings ...
PACIFIC LUMBER BANKRUPTCY REORGANIZATION PLAN WOULD SELL, DEVELOP ...
By Rex Frankel(Rex Frankel)
The long-awaited corporate reorganization plan that Pacific Lumber must, by law, submit to the bankruptcy court under Chapter 11 bankruptcy proceedings is out, after two extensions. Under bankruptcy law, the debtor (PL) gets the first ...
238 - Earth Tree News
By olyecology(olyecology)
Pacific Lumber's Michael Claes said there are three main elements to the plan, which puts the value of its holdings at about $1.4 billion. The deal would include: 1) Selling 6600 acres of ancient redwood groves for $300 million, ...
The unending battle
By Rose(Rose)
The heart of the Humboldt County Watershed Council's allegations comes in Herman's present affiliations with the Pacific Lumber Co. As a private attorney, according to the council, Herman represents the Scotia-based lumber company -- an ...
Pacific Lumber looking to sell
Dan Lyke: Pacific Lumber asking bankruptcy judge to be allowed to sell 29000 acres of northern California redwood forest. You may remember Pacific Lumber as the company that was "overvalued" as a long-term responsible steward of its ...
4.28.2007
DEBT FOR TREES PART 1 and PART 2
This is an interesting chronology of the Pacific Lumber/Headwaters saga, complete with the high level players, and the pressure groups, big Foundations and extremist environmental groups:
This is the link to this two part series. It works most of the time.
DEBT FOR TREES PART 1
from there you can link to PART 2.
Both are included below:
DEBT FOR TREES PART 1
By Jon Christian Ryter September 1, 2005 NewsWithViews.com
Houston financier and corporate raider Charles Hurwitz's problems began with the collapse of a little known Texas thrift in 1988, United Savings Association of Texas—only Hurwitz's purported complicity in the collapse of the savings and loan company never surfaced until about the time his company, MCO Holdings (which changed its name in 1995 to Maxxam, Inc.) assumed Pacific Lumber Company in 1986. Once the Pacific Lumber buyout was complete Hurwitz's problems began. But not from the US government— from environmentalists.
One of Pacific Lumber's most valuable assets was a stand of 1,000-plus year old coastal redwood trees in Humboldt County—in a 6,000 acre tract of ancient redwoods in the 90,000 acre Headwaters' Forest know as the Headwaters Grove. Each of the 300 foot tall ancient giant redwoods have a commercial street value—as cut lumber—of at least $100,000. Hurwitz, who used junk bonds to finance his takeover of Pacific Lumber needed to liquidate some of the assets of the newly acquired company to pay down the debt.
Hurwitz became interested in Pacific Lumber when junk bond investment banker Drexel Burnham Lambert advised MCO that Pacific Lumber had made an overpriced offer to buy back its own stock in 1984, causing MCO to take a closer look at the company as a potential hostile takeover since Pacific was not interested in suitors. And the closer Hurwitz looked, the better Pacific Lumber looked. Finally, in October, 1985 he went after it, assuming control of the company in 1986.
Environmentalists feared Hurwitz would clear-cut the Headwaters Grove of its ancient treasures to pay for the takeover. In reality, Hurwitz already planned to sell off specific assets of Pacific Lumber to pay for the takeover—and the Headwaters Grove was not part of his thinking. However, MCO Holdings, which was extremely leveraged, still needed to generate a revenue stream, and planned to clear-cut up to a thousand acres of Pacific Lumber's expansive reserve of Douglas pines, spruce, coastal redwoods and other timber species which the company owned. Within a matter of months, Hurwitz doubled Pacific Lumber's relatively conservative lumber harvesting practices. That convinced the greens that a land-stripper had taken over the 117 year old company.
Pacific Lumber was an institution in northern California, and had been since 1869. It was the largest employer in Humboldt County, owning around 194,000 acres of prime timberland worth billions of dollars at retail. Yet, it was not as profitable as it could have been, or should have been, due to environmentalists who did everything possible to hamstring logging operations for over a decade. The constant inference of Pacific's logging operation by radical green groups made Pacific Lumber "easy pickings" for any corporate raider. When Hurwitz took it over it wasn't long before green groups like Earth First!, the Sierra Club and Greenpeace were targeting Hurwitz, who became the "scorched earth" villain.
In January 1995, Humboldt environmentalist activist Robert Martel filled a lawsuit in US District Court against Maxxam, Industries seeking $1.6 billion to cover the losses suffered by Maxxam's bankrupt S&L, United Savings Association of Texas plus an additional $4.8 billion in punitive damages on behalf of the American taxpayers. Because Martel represented neither the government nor the depositors of United Savings, there was no legal basis for his filing. But, his lawsuit opened Pandora's box. When the federal court—which should never have accepted the action in the first placed—ruled against him, Martel appealed that court's decision to the 5th Circuit Court of Appeals. The appellate court not only rejected Martel's appeal, it ordered him to pay Maxxam's legal fees of more than $110,000, saying that Martel's case was "frivolous"
In August of 1995, FDIC Chairman Ricki Tigert-Helfer filed the first of two "recovery" lawsuits in US District Court in Houston. The action, FDIC v Hurwitz, sought $250 million in damages—not from Maxxam (as MCO Holding had been renamed)—but from Hurwitz personally. When she filed her suit, Tigert-Helfer asked the Office of Thrift Management to investigate Charles Hurwitz and Maxxam for wrongdoing. In December, 1995 the Office of Thrift Management filed 13 claims against the defendants of its own lawsuit—against Hurwitz, Maxxam, two other Maxxam companies: Federated Development Company, United Financial Group (which was the parent company of United Savings), and the former and current directors of the S&L. The OTM sought $821 million in damages. The FDIC and the OTM both alleged that Hurwitz's business dealings with Drexel Burnham Lambert contributed significantly to the thrift's failure by not keeping it properly capitalized. They also alleged that Hurwitz "raided" the assets of United Savings to purchase Pacific Lumber, making Hurwitz personally liable for the $1.6 billion the OTM claims United Savings lost.
From the time the dual actions were filed by the FDIC and the OTM, Hurwitz's lawyer, Richard Keeton, was approached by various environmental groups suggesting that the government would entertain a "debt-for-trees" swap. Hurwitz would get to walk away from the FDIC and OTM charges if he agreed to allow the old stand of 300' tall redwoods in Headwaters Grove be deeded to the US government. The government would make the Headwaters redwoods part of the Six Rivers National Forest. In the early 1990s, Howard Hughes' estate engaged in a "debt for nature" swap when the estate traded some wetlands near the Los Angeles Airport to settle a tax bill owed the State of California. Several third world countries swapped land that US environmentalists thought should be protected for the debt they owed the United States. Bolivia traded tropical forests to clear their debt. Land swaps were also done with the Philippines and several other nations as well.
In February, 1997 Deputy Interior Secretary John Garamendi approached Maxxam to arrange for the acquisition of the Headwater Grove. Maxxam's general counsel, J. Kent Friedman, told the Clinton Administration official that Maxxam would consider selling the Headwater Grove to the Interior Department—but only on the condition that the government drop its FDIC lawsuit. "We want this case to go away," Friedman said.
Garamendi reported "...Hurwitz brought that to the table numerous times," but he added, he refused to intervene on Hurwitz's behalf, concluding it would be inappropriate for the Interior Department to get involved in the FDIC's business. Friedman said Maxxam raised the issue about the FDIC case because the action should never have been filed against Hurwitz who had undergone a lengthy, politically-motivated and ultimately unproved investigation by the Clinton Administration and a federal agency that violated its own rules in bringing the action. Hurwitz was not liable for the failure of United Savings because neither he nor Maxxam had controlling interest in United Financial—the holding company that had a minority interest in United Savings—therefore neither Hurwitz nor Maxxam had any legal authority to control the capital levels at the thrift.
At the time the Garamendi negotiations were underway, the Rose Foundation for Communities and the Government and several other environmentalist groups managed to convince a federal court that Pacific Lumber and a neighboring lumbering camp, Elk River Timber Company, had both violated the Endangered Species Act by logging pristine forests that sheltered the spotted owl. The federal court issued an injunction forbidding either Elk River Timber or Pacific Lumber from harvesting their land. Nine times the environmentalists filed suit in federal court. Nine times the court issued injunctions forbidding the lumber companies from cutting trees on their own land due to violations of the Endangered Species Act.
(Author's note: While I did not find documents to support my belief that Hurwitz, Friedman and Keeton were very bluntly, off-the-record, advised that they might as well sell the Headwater Grove to the environmentalists and get something for their buck because it was unlikely that, anytime in the foreseeable future, they would be able to harvest any lumber from that area since the Headwaters Forest was home to the spotted owl.)
In 1999 Hurwitz caved in and sold 10,000 acres of Headwaters Forest land to the Department of the Interior for $480 million. The deal was brokered by Sen. Diane Feinstein to preserve the old growth giant coastlal redwoods. In 2002 the FDIC dropped its 250 million action against Hurwitz when the OTM settled their $821 million case under an agreement where Hurwitz paid $206 thousand, made no admissions of wrongdoing, and agreed not to discuss the suit or the settlement.
But in his settlement, Hurwitz never agreed not to file suit against the government. He immediately sued the FDIC, by asking US District Court Judge Lynn Hughes (the presiding judge in the government's case) to award him $72 million in damages to cover his costs to fight not only the FDIC charges, but the costs associated with fighting to keep the government from seizing his redwood trees—and fighting frivolous lawsuits from the Rose Foundation, the Sierra Club, Greenpeace, Earth First! and scores of other green groups who lined up to take their best shot at Maxxam in court while Maxxam and Hurwitz were distracted with the FDIC lawsuit.
Don't miss the concuding Part 2 "whodunnit" to understand how our fine justice system really works.
© 2005 Jon C. Ryter - All Rights Reserved
DEBT FOR TREES
PART 2
By Jon Christian Ryter September 1, 2005 NewsWithViews.com
In 1999 Charles Hurwitz caved in and sold 10,000 acres of Headwaters Forest land to the Department of the Interior for $480 million. The deal was brokered by Sen. Diane Feinstein to preserve the old growth giant coastlal redwoods. In 2002 the FDIC dropped its 250 million action against Hurwitz when the OTM settled their $821 million case under an agreement where Hurwitz paid $206 thousand, made no admissions of wrongdoing, and agreed not to discuss the suit or the settlement.
But in his settlement, Hurwitz never agreed not to file suit against the government. He immediately sued the FDIC, by asking US District Court Judge Lynn Hughes (the presiding judge in the government's case) to award him $72 million in damages to cover his costs to fight not only the FDIC charges, but the costs associated with fighting to keep the government from seizing his redwood trees—and fighting frivolous lawsuits from the Rose Foundation, the Sierra Club, Greenpeace, Earth First! and scores of other green groups who lined up to take their best shot at Maxxam in court while Maxxam and Hurwitz were distracted with the FDIC lawsuit.
Hurwitz, through his lawyers, claimed that the Clinton Administration's FDIC [a] improperly funded another government agency's investigative witch hunt against Maxxam on the same matter; and, [b] his suite alleged that the Clinton Administration used bogus lawsuits in an attempt to force him to surrender over a billion dollars worth of prime coastal redwood trees to settle bogus claims against him and his company.
On Tuesday, August 23, 2005 US District Court Judge Lynn Nettleton Hughes issued his decision in FDIC v Hurwitz. It was a scathing denunciation of a government, pressured by radical environmentalist, to railroad an innocent man solely to steal his land for special interest extremists. In what is now the largest judgment against a federal agency ever awarded, Hughes ordered the FDIC to pay Hurwitz $72.3 million. In his 133-page decision, Hughes compared the federal investigations of Hurwitz and Maxxam to "...secret society of extortionists [that had practiced] craven submission [when faced with pressure from the office of the Vice President of the United States and] the green groups to cause him pain." Hughes said Hurwitz was the victim of a vindictive and politically-motivated federal agency. Hughes referred to the ordeal Hurwitz was forced to endure in terms of the Boston Tea Party, writing that "...Sam Adams would say that somebody needs to dump the FDIC's tea overboard." Hughes found, in his decision, that the FDIC, in close concert with environmental groups, sued Hurwitz to pressure him into a "debt-for-nature" swap, in effect giving the government about a billion dollars worth of trees in exchange for his supposed liability in the failure of the United Savings Association of Texas.
Paul Mason, a lobbyist and green activist for the Sierra Club summed up the view of the environmentalist movement when he noted that Judge Hughes had been hostile to the government's case against Hurwitz from the beginning. "To state that the environmental community was steering the case," Mason told the media, "would strongly overstate the influence we had with the federal government."
The question is, who's telling the truth and who's lying? That's the part of the story you won't read in your local newspaper this evening—nor will you see it on Fox News. The chronology of events is not deeply hidden. A Google search will bring you most of the headlines. A little digging will give you the rest.
For the environmentalists to even suggest that not only were they not steering the Hurwitz case, but that they hadn't engineered it by persuading Vice President Al Gore, Interior Secretary Bruce Babbitt and other bureaucrats in the Clinton Administration to run interference for them in filing a lawsuit for damages against Maxxam that would force Hurwitz to agree to a "debt-for-nature" swap to alleviate his liability in the failure of United Savings Association of Texas—when the FDIC and the Clinton Justice Department knew he was not legally culpable for the failure of the S&L.
The radical environmentalist Earth First! hatched up the scheme for the FDIC to sue Hurwitz for the failure shortly after the co-presidency of Bill and Hillary Clinton descended on Washington, DC. In the usual fashion of the green extremists, Earth First! revealed its idea in a Spring, 1993 demonstration in front of the FDIC, demanding that the government take the old-growth redwoods that belonged to Pacific Lumber Company to settle any claims the FDIC should have with another Hurwitz company, the failed S&L, United Savings Association of Texas. Earth First! later insisted that their suggestion was politely offered at that time only because of the fear that Hurwitz would destroy the thousand year old trees that shielded the habitat of the spotted owl and other endangered species that lived in the Headwaters Forest in Humboldt County, California.
From that demonstration in 1993, both the Clinton Administration and Congress became acutely aware of the Headwaters Forest, Charles Hurwitz, United Savings Association of Texas and the implied liability of Hurwitz, whom the environmentalists claimed raided the assets of United Savings to leverage Pacific Lumber. Shortly after the demonstration Greenpeace, the Sierra Club Legal Defense Fund and the Rose Foundation for Community and the Government began to leverage Congress and Mr. Environment—Al Gore, Jr. The Rose Foundation and the Sierra Club became fixtures on Capitol Hill as they made their way from one Congressional and Senatorial office to another, and from the FDIC to the Office of Thrift Management, to the White House and Blair House, asking for legislation that would both implicate and exonerate Hurwitz by arranging a debt-for-trees swap in which the FDIC would exchange Hurwitz's liability in United Savings for 57,000 to 76,000 acres of Headwaters Forest which would be placed in the public trust.
In 1994 Congressman Dan Hamburg [D-CA] introduced a bill in the House of Representatives that would authorize the US Forest Service to "negotiate" the transfer of the Headwaters Forest under eminent domain to the US government and make it part of the Six Rivers National Forest. The bill passed in the House, but the Senate version of the bill, introduced by Barbara Boxer [D-CA], never made it out of committee and onto the Senate floor for a vote. When the GOP Revolution in November of 1994 pushed the Democrats out of all of the committee chairs in both the House and Senate, the odds of enacting the Headwaters bill was greatly diminished. The environmentalists reverted to the suggestion made by Earth First!—convince the FDIC to file suit against Hurwitz and then swap the Headwaters for a release from liability on United Savings Association of Texas.
It was after the defeat of The Hamburg-Boxer Act that Jill Ratner, the lawyer activist head of the Rose Foundation intensified her letter-writing campaign to entice FDIC Chairman Tigert-Helfer to file a lawsuit against Hurwitz and then do a debt-for-trees swap to settle the 1,000 year old redwood tree matter for all time. Ricki Tigert-Helfer replied to Ratner that the FDIC could not compel the defendants of any legal action to consider a debt-for-nature swap since they might decide to use other assets to satisfy their liability. It was obvious that the Bush-41 Administration clearly understood that minority shareholders in companies—unless they are board members—have no fiduciary control over the company, and thus can't be held liable for any capitalization shortfalls of the company. And, it was clear that, by the end of 1994 the Clinton Administration believed they could arbitrarily assign "fault," and in the Headwaters Forest matter, they had arbitrarily decided that Charles Hurwitz was culpable in the United Savings matter because the Sierra Club, Earth First!, Greenpeace and the Rose Foundation convinced the Clinton Administration—without any actual evidence to support their position—that Hurwitz had gutted United Savings Association and used what could be construed as stolen assets to buy Pacific Lumber. Thus, since ill-gotten gains paid for Pacific, it was only fitting to the environmentalists calling for it, that Pacific Lumber assets be used to satisfy the government's case against Hurwitz.
Ratner even raised the issue of debt-for-nature with Maxxam lawyers on several times. One one occasion, Maxxam spokesman Joshua Reiss dismissed Ratner's swap suggestion as a flawed premise since, he said, there is no debt to swap. Hurwitz, he told the media, had done nothing wrong. Since he did not possess controlling interest in United Savings, he had no legal authority to influence their policies.
John V. Thomas, associate general counsel for the FDIC wrote to a green activist, Larry Helbrook of Eleva, Wisconsin on August 23, 1994. Helbrook inquired about a possible debt-for-nature swap to protect the ancient Sequoia giants. Thomas responded, saying "We are mindful of the possibility that if Pacific Lumber's parent can be held liable for our losses, issues involving the redwood forests might be brought into play."
Shortly after she filed suit against Hurwitz, Tigert-Helfer wrote a letter to then US Congressman David E. Skaggs in which she said, in response to his question: "You may be assured that the government remains open to any appropriate settlement of this claim—including a debt-for-nature swap."
Throughout the last months of 1994 there was a flurry of high level meetings between the environmentalist lobbyists from Greenpeace, the Sierra Club, and the Rose Foundation, several liberal Congressmen and Senators, some high level Clinton Administration officials, and Vice President Al Gore who functioned as "control central" on the Hurwitz-Headwaters Forest matter. The high level meetings produced a compromise between the environmentalists and the Clinton Administration. The Al Gore emissary, Deputy Interior Secretary John Garamendi, was sent to Sacramento to meet with Hurwitz and his lawyers and negotiate the "surrender" of the Headwaters Forest.
For the environmentalists and former Clinton-Gore officials to claim they did not originate the debt-for-nature swap, or attempt to influence the filing of charges against Charles Hurwitz by the FDIC specifically to pressure him into settling the lawsuit by trading a billion dollars worth of redwood trees for a handful of spotted owls. Judge Lynn Hughes was right—the government lied. FDIC officials "...discarded the mantle of the American Republic for the clock of a secret society of extortionists. If the Vice President called, they responded. If a lobbyist called, they responded. They heeded every call but that of duty and honor."
FDIC spokesman David Barr said the agency will appeal the judgment. If the 5th Circuit Court knows how to do a Google search, without even holding a hearing, it will find enough material to uphold the opinion of Judge Hughes. If, on the other hand, the judges on the 5th Circuit believe that the Clinton-Gore Administration was an honest broker of justice, they will likely overrule one of the most intelligent decisions made by a US District Court Judge in 50 years.
Back to -----> Part 1
© 2005 Jon C. Ryter - All Rights Reserved
Order Jon Ryter's book "Whatever Happened to America?"
http://www.newswithviews.com/Ryter/jon99.htm
This is the link to this two part series. It works most of the time.
DEBT FOR TREES PART 1
from there you can link to PART 2.
Both are included below:
DEBT FOR TREES PART 1
By Jon Christian Ryter September 1, 2005 NewsWithViews.com
Houston financier and corporate raider Charles Hurwitz's problems began with the collapse of a little known Texas thrift in 1988, United Savings Association of Texas—only Hurwitz's purported complicity in the collapse of the savings and loan company never surfaced until about the time his company, MCO Holdings (which changed its name in 1995 to Maxxam, Inc.) assumed Pacific Lumber Company in 1986. Once the Pacific Lumber buyout was complete Hurwitz's problems began. But not from the US government— from environmentalists.
One of Pacific Lumber's most valuable assets was a stand of 1,000-plus year old coastal redwood trees in Humboldt County—in a 6,000 acre tract of ancient redwoods in the 90,000 acre Headwaters' Forest know as the Headwaters Grove. Each of the 300 foot tall ancient giant redwoods have a commercial street value—as cut lumber—of at least $100,000. Hurwitz, who used junk bonds to finance his takeover of Pacific Lumber needed to liquidate some of the assets of the newly acquired company to pay down the debt.
Hurwitz became interested in Pacific Lumber when junk bond investment banker Drexel Burnham Lambert advised MCO that Pacific Lumber had made an overpriced offer to buy back its own stock in 1984, causing MCO to take a closer look at the company as a potential hostile takeover since Pacific was not interested in suitors. And the closer Hurwitz looked, the better Pacific Lumber looked. Finally, in October, 1985 he went after it, assuming control of the company in 1986.
Environmentalists feared Hurwitz would clear-cut the Headwaters Grove of its ancient treasures to pay for the takeover. In reality, Hurwitz already planned to sell off specific assets of Pacific Lumber to pay for the takeover—and the Headwaters Grove was not part of his thinking. However, MCO Holdings, which was extremely leveraged, still needed to generate a revenue stream, and planned to clear-cut up to a thousand acres of Pacific Lumber's expansive reserve of Douglas pines, spruce, coastal redwoods and other timber species which the company owned. Within a matter of months, Hurwitz doubled Pacific Lumber's relatively conservative lumber harvesting practices. That convinced the greens that a land-stripper had taken over the 117 year old company.
Pacific Lumber was an institution in northern California, and had been since 1869. It was the largest employer in Humboldt County, owning around 194,000 acres of prime timberland worth billions of dollars at retail. Yet, it was not as profitable as it could have been, or should have been, due to environmentalists who did everything possible to hamstring logging operations for over a decade. The constant inference of Pacific's logging operation by radical green groups made Pacific Lumber "easy pickings" for any corporate raider. When Hurwitz took it over it wasn't long before green groups like Earth First!, the Sierra Club and Greenpeace were targeting Hurwitz, who became the "scorched earth" villain.
In January 1995, Humboldt environmentalist activist Robert Martel filled a lawsuit in US District Court against Maxxam, Industries seeking $1.6 billion to cover the losses suffered by Maxxam's bankrupt S&L, United Savings Association of Texas plus an additional $4.8 billion in punitive damages on behalf of the American taxpayers. Because Martel represented neither the government nor the depositors of United Savings, there was no legal basis for his filing. But, his lawsuit opened Pandora's box. When the federal court—which should never have accepted the action in the first placed—ruled against him, Martel appealed that court's decision to the 5th Circuit Court of Appeals. The appellate court not only rejected Martel's appeal, it ordered him to pay Maxxam's legal fees of more than $110,000, saying that Martel's case was "frivolous"
In August of 1995, FDIC Chairman Ricki Tigert-Helfer filed the first of two "recovery" lawsuits in US District Court in Houston. The action, FDIC v Hurwitz, sought $250 million in damages—not from Maxxam (as MCO Holding had been renamed)—but from Hurwitz personally. When she filed her suit, Tigert-Helfer asked the Office of Thrift Management to investigate Charles Hurwitz and Maxxam for wrongdoing. In December, 1995 the Office of Thrift Management filed 13 claims against the defendants of its own lawsuit—against Hurwitz, Maxxam, two other Maxxam companies: Federated Development Company, United Financial Group (which was the parent company of United Savings), and the former and current directors of the S&L. The OTM sought $821 million in damages. The FDIC and the OTM both alleged that Hurwitz's business dealings with Drexel Burnham Lambert contributed significantly to the thrift's failure by not keeping it properly capitalized. They also alleged that Hurwitz "raided" the assets of United Savings to purchase Pacific Lumber, making Hurwitz personally liable for the $1.6 billion the OTM claims United Savings lost.
From the time the dual actions were filed by the FDIC and the OTM, Hurwitz's lawyer, Richard Keeton, was approached by various environmental groups suggesting that the government would entertain a "debt-for-trees" swap. Hurwitz would get to walk away from the FDIC and OTM charges if he agreed to allow the old stand of 300' tall redwoods in Headwaters Grove be deeded to the US government. The government would make the Headwaters redwoods part of the Six Rivers National Forest. In the early 1990s, Howard Hughes' estate engaged in a "debt for nature" swap when the estate traded some wetlands near the Los Angeles Airport to settle a tax bill owed the State of California. Several third world countries swapped land that US environmentalists thought should be protected for the debt they owed the United States. Bolivia traded tropical forests to clear their debt. Land swaps were also done with the Philippines and several other nations as well.
In February, 1997 Deputy Interior Secretary John Garamendi approached Maxxam to arrange for the acquisition of the Headwater Grove. Maxxam's general counsel, J. Kent Friedman, told the Clinton Administration official that Maxxam would consider selling the Headwater Grove to the Interior Department—but only on the condition that the government drop its FDIC lawsuit. "We want this case to go away," Friedman said.
Garamendi reported "...Hurwitz brought that to the table numerous times," but he added, he refused to intervene on Hurwitz's behalf, concluding it would be inappropriate for the Interior Department to get involved in the FDIC's business. Friedman said Maxxam raised the issue about the FDIC case because the action should never have been filed against Hurwitz who had undergone a lengthy, politically-motivated and ultimately unproved investigation by the Clinton Administration and a federal agency that violated its own rules in bringing the action. Hurwitz was not liable for the failure of United Savings because neither he nor Maxxam had controlling interest in United Financial—the holding company that had a minority interest in United Savings—therefore neither Hurwitz nor Maxxam had any legal authority to control the capital levels at the thrift.
At the time the Garamendi negotiations were underway, the Rose Foundation for Communities and the Government and several other environmentalist groups managed to convince a federal court that Pacific Lumber and a neighboring lumbering camp, Elk River Timber Company, had both violated the Endangered Species Act by logging pristine forests that sheltered the spotted owl. The federal court issued an injunction forbidding either Elk River Timber or Pacific Lumber from harvesting their land. Nine times the environmentalists filed suit in federal court. Nine times the court issued injunctions forbidding the lumber companies from cutting trees on their own land due to violations of the Endangered Species Act.
(Author's note: While I did not find documents to support my belief that Hurwitz, Friedman and Keeton were very bluntly, off-the-record, advised that they might as well sell the Headwater Grove to the environmentalists and get something for their buck because it was unlikely that, anytime in the foreseeable future, they would be able to harvest any lumber from that area since the Headwaters Forest was home to the spotted owl.)
In 1999 Hurwitz caved in and sold 10,000 acres of Headwaters Forest land to the Department of the Interior for $480 million. The deal was brokered by Sen. Diane Feinstein to preserve the old growth giant coastlal redwoods. In 2002 the FDIC dropped its 250 million action against Hurwitz when the OTM settled their $821 million case under an agreement where Hurwitz paid $206 thousand, made no admissions of wrongdoing, and agreed not to discuss the suit or the settlement.
But in his settlement, Hurwitz never agreed not to file suit against the government. He immediately sued the FDIC, by asking US District Court Judge Lynn Hughes (the presiding judge in the government's case) to award him $72 million in damages to cover his costs to fight not only the FDIC charges, but the costs associated with fighting to keep the government from seizing his redwood trees—and fighting frivolous lawsuits from the Rose Foundation, the Sierra Club, Greenpeace, Earth First! and scores of other green groups who lined up to take their best shot at Maxxam in court while Maxxam and Hurwitz were distracted with the FDIC lawsuit.
Don't miss the concuding Part 2 "whodunnit" to understand how our fine justice system really works.
© 2005 Jon C. Ryter - All Rights Reserved
DEBT FOR TREES
PART 2
By Jon Christian Ryter September 1, 2005 NewsWithViews.com
In 1999 Charles Hurwitz caved in and sold 10,000 acres of Headwaters Forest land to the Department of the Interior for $480 million. The deal was brokered by Sen. Diane Feinstein to preserve the old growth giant coastlal redwoods. In 2002 the FDIC dropped its 250 million action against Hurwitz when the OTM settled their $821 million case under an agreement where Hurwitz paid $206 thousand, made no admissions of wrongdoing, and agreed not to discuss the suit or the settlement.
But in his settlement, Hurwitz never agreed not to file suit against the government. He immediately sued the FDIC, by asking US District Court Judge Lynn Hughes (the presiding judge in the government's case) to award him $72 million in damages to cover his costs to fight not only the FDIC charges, but the costs associated with fighting to keep the government from seizing his redwood trees—and fighting frivolous lawsuits from the Rose Foundation, the Sierra Club, Greenpeace, Earth First! and scores of other green groups who lined up to take their best shot at Maxxam in court while Maxxam and Hurwitz were distracted with the FDIC lawsuit.
Hurwitz, through his lawyers, claimed that the Clinton Administration's FDIC [a] improperly funded another government agency's investigative witch hunt against Maxxam on the same matter; and, [b] his suite alleged that the Clinton Administration used bogus lawsuits in an attempt to force him to surrender over a billion dollars worth of prime coastal redwood trees to settle bogus claims against him and his company.
On Tuesday, August 23, 2005 US District Court Judge Lynn Nettleton Hughes issued his decision in FDIC v Hurwitz. It was a scathing denunciation of a government, pressured by radical environmentalist, to railroad an innocent man solely to steal his land for special interest extremists. In what is now the largest judgment against a federal agency ever awarded, Hughes ordered the FDIC to pay Hurwitz $72.3 million. In his 133-page decision, Hughes compared the federal investigations of Hurwitz and Maxxam to "...secret society of extortionists [that had practiced] craven submission [when faced with pressure from the office of the Vice President of the United States and] the green groups to cause him pain." Hughes said Hurwitz was the victim of a vindictive and politically-motivated federal agency. Hughes referred to the ordeal Hurwitz was forced to endure in terms of the Boston Tea Party, writing that "...Sam Adams would say that somebody needs to dump the FDIC's tea overboard." Hughes found, in his decision, that the FDIC, in close concert with environmental groups, sued Hurwitz to pressure him into a "debt-for-nature" swap, in effect giving the government about a billion dollars worth of trees in exchange for his supposed liability in the failure of the United Savings Association of Texas.
Paul Mason, a lobbyist and green activist for the Sierra Club summed up the view of the environmentalist movement when he noted that Judge Hughes had been hostile to the government's case against Hurwitz from the beginning. "To state that the environmental community was steering the case," Mason told the media, "would strongly overstate the influence we had with the federal government."
The question is, who's telling the truth and who's lying? That's the part of the story you won't read in your local newspaper this evening—nor will you see it on Fox News. The chronology of events is not deeply hidden. A Google search will bring you most of the headlines. A little digging will give you the rest.
For the environmentalists to even suggest that not only were they not steering the Hurwitz case, but that they hadn't engineered it by persuading Vice President Al Gore, Interior Secretary Bruce Babbitt and other bureaucrats in the Clinton Administration to run interference for them in filing a lawsuit for damages against Maxxam that would force Hurwitz to agree to a "debt-for-nature" swap to alleviate his liability in the failure of United Savings Association of Texas—when the FDIC and the Clinton Justice Department knew he was not legally culpable for the failure of the S&L.
The radical environmentalist Earth First! hatched up the scheme for the FDIC to sue Hurwitz for the failure shortly after the co-presidency of Bill and Hillary Clinton descended on Washington, DC. In the usual fashion of the green extremists, Earth First! revealed its idea in a Spring, 1993 demonstration in front of the FDIC, demanding that the government take the old-growth redwoods that belonged to Pacific Lumber Company to settle any claims the FDIC should have with another Hurwitz company, the failed S&L, United Savings Association of Texas. Earth First! later insisted that their suggestion was politely offered at that time only because of the fear that Hurwitz would destroy the thousand year old trees that shielded the habitat of the spotted owl and other endangered species that lived in the Headwaters Forest in Humboldt County, California.
From that demonstration in 1993, both the Clinton Administration and Congress became acutely aware of the Headwaters Forest, Charles Hurwitz, United Savings Association of Texas and the implied liability of Hurwitz, whom the environmentalists claimed raided the assets of United Savings to leverage Pacific Lumber. Shortly after the demonstration Greenpeace, the Sierra Club Legal Defense Fund and the Rose Foundation for Community and the Government began to leverage Congress and Mr. Environment—Al Gore, Jr. The Rose Foundation and the Sierra Club became fixtures on Capitol Hill as they made their way from one Congressional and Senatorial office to another, and from the FDIC to the Office of Thrift Management, to the White House and Blair House, asking for legislation that would both implicate and exonerate Hurwitz by arranging a debt-for-trees swap in which the FDIC would exchange Hurwitz's liability in United Savings for 57,000 to 76,000 acres of Headwaters Forest which would be placed in the public trust.
In 1994 Congressman Dan Hamburg [D-CA] introduced a bill in the House of Representatives that would authorize the US Forest Service to "negotiate" the transfer of the Headwaters Forest under eminent domain to the US government and make it part of the Six Rivers National Forest. The bill passed in the House, but the Senate version of the bill, introduced by Barbara Boxer [D-CA], never made it out of committee and onto the Senate floor for a vote. When the GOP Revolution in November of 1994 pushed the Democrats out of all of the committee chairs in both the House and Senate, the odds of enacting the Headwaters bill was greatly diminished. The environmentalists reverted to the suggestion made by Earth First!—convince the FDIC to file suit against Hurwitz and then swap the Headwaters for a release from liability on United Savings Association of Texas.
It was after the defeat of The Hamburg-Boxer Act that Jill Ratner, the lawyer activist head of the Rose Foundation intensified her letter-writing campaign to entice FDIC Chairman Tigert-Helfer to file a lawsuit against Hurwitz and then do a debt-for-trees swap to settle the 1,000 year old redwood tree matter for all time. Ricki Tigert-Helfer replied to Ratner that the FDIC could not compel the defendants of any legal action to consider a debt-for-nature swap since they might decide to use other assets to satisfy their liability. It was obvious that the Bush-41 Administration clearly understood that minority shareholders in companies—unless they are board members—have no fiduciary control over the company, and thus can't be held liable for any capitalization shortfalls of the company. And, it was clear that, by the end of 1994 the Clinton Administration believed they could arbitrarily assign "fault," and in the Headwaters Forest matter, they had arbitrarily decided that Charles Hurwitz was culpable in the United Savings matter because the Sierra Club, Earth First!, Greenpeace and the Rose Foundation convinced the Clinton Administration—without any actual evidence to support their position—that Hurwitz had gutted United Savings Association and used what could be construed as stolen assets to buy Pacific Lumber. Thus, since ill-gotten gains paid for Pacific, it was only fitting to the environmentalists calling for it, that Pacific Lumber assets be used to satisfy the government's case against Hurwitz.
Ratner even raised the issue of debt-for-nature with Maxxam lawyers on several times. One one occasion, Maxxam spokesman Joshua Reiss dismissed Ratner's swap suggestion as a flawed premise since, he said, there is no debt to swap. Hurwitz, he told the media, had done nothing wrong. Since he did not possess controlling interest in United Savings, he had no legal authority to influence their policies.
John V. Thomas, associate general counsel for the FDIC wrote to a green activist, Larry Helbrook of Eleva, Wisconsin on August 23, 1994. Helbrook inquired about a possible debt-for-nature swap to protect the ancient Sequoia giants. Thomas responded, saying "We are mindful of the possibility that if Pacific Lumber's parent can be held liable for our losses, issues involving the redwood forests might be brought into play."
Shortly after she filed suit against Hurwitz, Tigert-Helfer wrote a letter to then US Congressman David E. Skaggs in which she said, in response to his question: "You may be assured that the government remains open to any appropriate settlement of this claim—including a debt-for-nature swap."
Throughout the last months of 1994 there was a flurry of high level meetings between the environmentalist lobbyists from Greenpeace, the Sierra Club, and the Rose Foundation, several liberal Congressmen and Senators, some high level Clinton Administration officials, and Vice President Al Gore who functioned as "control central" on the Hurwitz-Headwaters Forest matter. The high level meetings produced a compromise between the environmentalists and the Clinton Administration. The Al Gore emissary, Deputy Interior Secretary John Garamendi, was sent to Sacramento to meet with Hurwitz and his lawyers and negotiate the "surrender" of the Headwaters Forest.
For the environmentalists and former Clinton-Gore officials to claim they did not originate the debt-for-nature swap, or attempt to influence the filing of charges against Charles Hurwitz by the FDIC specifically to pressure him into settling the lawsuit by trading a billion dollars worth of redwood trees for a handful of spotted owls. Judge Lynn Hughes was right—the government lied. FDIC officials "...discarded the mantle of the American Republic for the clock of a secret society of extortionists. If the Vice President called, they responded. If a lobbyist called, they responded. They heeded every call but that of duty and honor."
FDIC spokesman David Barr said the agency will appeal the judgment. If the 5th Circuit Court knows how to do a Google search, without even holding a hearing, it will find enough material to uphold the opinion of Judge Hughes. If, on the other hand, the judges on the 5th Circuit believe that the Clinton-Gore Administration was an honest broker of justice, they will likely overrule one of the most intelligent decisions made by a US District Court Judge in 50 years.
Back to -----> Part 1
© 2005 Jon C. Ryter - All Rights Reserved
Order Jon Ryter's book "Whatever Happened to America?"
http://www.newswithviews.com/Ryter/jon99.htm
HC - It seems like Charles Hurwitz just can't catch a break
It seems like Charles Hurwitz just can't catch a break
Business: Loren Steffy
Jan. 23, 2007, 11:13PM Copyright 2007 Houston Chronicle
Victory seems to forever elude Charles Hurwitz.
In 1999, he hammered out an agreement with California and federal officials to preserve old-growth redwood trees while allowing his logging company, Pacific Lumber, to cut enough new-growth trees to make a profit.
The deal, known as the Headwaters Agreement, was supposed to broker peace between Hurwitz and environmental groups that opposed his company's logging operations.
More importantly, it should have been a model for how private industry can work with other groups to preserve the environment.
Last week, Pacific Lumber filed for bankruptcy, strangled by new regulations made outside the agreement.
"We were dealt a hand where we couldn't do anything," Hurwitz told me Monday. "It's a pure breach of contract."
Regional water boards, which weren't included in the Headwaters Agreement and therefore argue they aren't bound by it, ruled that runoff from Palco's logging was affecting rivers and streams in Northern California's scenic Humboldt County.
The boards imposed new restrictions.
Palco's timber harvest has fallen steadily as a result, to 145.5 million board feet in 2005 from 166.3 million in 2003, according to its annual filings with the Securities and Exchange Commission.
At the same time, the quality of the harvest shifted to lower grades of redwood and Douglas fir, which sell at a lower price.
The company wasn't making enough money to service its debt, part of which was incurred when Palco refurbished its mills for the newer growth trees as specified in the 1999 deal.
Over the years, the battle between Hurwitz and the environmentalists has grown personal. The protesters bristle at the thought of a single tree felled by Hurwitz's hand.
In a news release, Karen Pickett, director of one such group, the Bay Area Coalition for Headwaters, summed up the filing this way:
"The one thing we can look forward to ultimately is a Maxxam-free and Hurwitz-free company."
Unattractive
Then what?
What chance does Palco have for survival? It can't, under the latest environmental restrictions, produce enough lumber to turn a profit, whether it's owned by Hurwitz or someone else.
Bankruptcy may eliminate some of the company's debt, but it won't make Palco attractive to outside buyers. The threat of unending tree sittings and sabotage to logging operations makes Palco an unappealing purchase.
Hurwitz's adversaries spin a heartwarming myth about returning Palco to its days as an ecofriendly, family-run logging company.
But returning Palco to its old style of operations also returns it to the reality that left it vulnerable to Hurwitz's takeover 20 years ago. Palco was a mismanaged operation. Its executives hadn't done an accurate inventory of its timber lands in more than 30 years, and the "family" company's stock — which was traded on the New York Stock Exchange — languished.
In today's lumber industry, the margins have gotten thinner and the competition has increased. A return to Palco's past would promptly be followed by a return to bankruptcy court.
'Root of all evil'
For his part, Hurwitz has paid a hefty price for his ownership of Palco.
"This is the root of all evil for us," he said. "Everything that's bad in my business life has come out of this."
The environmental issues formed the basis for the Federal Deposit Insurance Corp.'s decadelong legal battle against Hurwitz. The lawsuit involved the failure of United Savings Association of Texas, but documents released as part of a congressional investigation revealed that regulators pursued a flimsy case to extract a settlement that would have included forfeiting Palco's old-growth redwood forest.
Hurwitz won, but the government appealed. With the case headed back to court, the victory is hollow. Palco's bankruptcy represents another eroded triumph, the collapse of the Headwaters Agreement.
The cycle remains unbroken and as vicious as it was before. Hurwitz and his foes in the environmental movement seem locked in perpetual conflict.
In many of these battles, Hurwitz has been right. But as last week's bankruptcy filing shows, you can be right and still lose.
Loren Steffy is the Chronicle's business columnist. His commentary appears Sundays, Wednesdays and Fridays. Contact him at loren.steffy at chron.com. His blog is at http://blogs.chron.com/lorensteffy/.
Business: Loren Steffy
Jan. 23, 2007, 11:13PM Copyright 2007 Houston Chronicle
Victory seems to forever elude Charles Hurwitz.
In 1999, he hammered out an agreement with California and federal officials to preserve old-growth redwood trees while allowing his logging company, Pacific Lumber, to cut enough new-growth trees to make a profit.
The deal, known as the Headwaters Agreement, was supposed to broker peace between Hurwitz and environmental groups that opposed his company's logging operations.
More importantly, it should have been a model for how private industry can work with other groups to preserve the environment.
Last week, Pacific Lumber filed for bankruptcy, strangled by new regulations made outside the agreement.
"We were dealt a hand where we couldn't do anything," Hurwitz told me Monday. "It's a pure breach of contract."
Regional water boards, which weren't included in the Headwaters Agreement and therefore argue they aren't bound by it, ruled that runoff from Palco's logging was affecting rivers and streams in Northern California's scenic Humboldt County.
The boards imposed new restrictions.
Palco's timber harvest has fallen steadily as a result, to 145.5 million board feet in 2005 from 166.3 million in 2003, according to its annual filings with the Securities and Exchange Commission.
At the same time, the quality of the harvest shifted to lower grades of redwood and Douglas fir, which sell at a lower price.
The company wasn't making enough money to service its debt, part of which was incurred when Palco refurbished its mills for the newer growth trees as specified in the 1999 deal.
Over the years, the battle between Hurwitz and the environmentalists has grown personal. The protesters bristle at the thought of a single tree felled by Hurwitz's hand.
In a news release, Karen Pickett, director of one such group, the Bay Area Coalition for Headwaters, summed up the filing this way:
"The one thing we can look forward to ultimately is a Maxxam-free and Hurwitz-free company."
Unattractive
Then what?
What chance does Palco have for survival? It can't, under the latest environmental restrictions, produce enough lumber to turn a profit, whether it's owned by Hurwitz or someone else.
Bankruptcy may eliminate some of the company's debt, but it won't make Palco attractive to outside buyers. The threat of unending tree sittings and sabotage to logging operations makes Palco an unappealing purchase.
Hurwitz's adversaries spin a heartwarming myth about returning Palco to its days as an ecofriendly, family-run logging company.
But returning Palco to its old style of operations also returns it to the reality that left it vulnerable to Hurwitz's takeover 20 years ago. Palco was a mismanaged operation. Its executives hadn't done an accurate inventory of its timber lands in more than 30 years, and the "family" company's stock — which was traded on the New York Stock Exchange — languished.
In today's lumber industry, the margins have gotten thinner and the competition has increased. A return to Palco's past would promptly be followed by a return to bankruptcy court.
'Root of all evil'
For his part, Hurwitz has paid a hefty price for his ownership of Palco.
"This is the root of all evil for us," he said. "Everything that's bad in my business life has come out of this."
The environmental issues formed the basis for the Federal Deposit Insurance Corp.'s decadelong legal battle against Hurwitz. The lawsuit involved the failure of United Savings Association of Texas, but documents released as part of a congressional investigation revealed that regulators pursued a flimsy case to extract a settlement that would have included forfeiting Palco's old-growth redwood forest.
Hurwitz won, but the government appealed. With the case headed back to court, the victory is hollow. Palco's bankruptcy represents another eroded triumph, the collapse of the Headwaters Agreement.
The cycle remains unbroken and as vicious as it was before. Hurwitz and his foes in the environmental movement seem locked in perpetual conflict.
In many of these battles, Hurwitz has been right. But as last week's bankruptcy filing shows, you can be right and still lose.
Loren Steffy is the Chronicle's business columnist. His commentary appears Sundays, Wednesdays and Fridays. Contact him at loren.steffy at chron.com. His blog is at http://blogs.chron.com/lorensteffy/.
4.01.2007
Why pay Salzman
Why pay Salzman for warmed over Times-Standard articles? Just google Pacific Lumber/Maxxam or sign up for your own google alerts...
In a message dated 3/31/2007 4:29:50 PM Pacific Daylight Time, aeb@inreach.com writes:
”Scopac doesn't follow the rules; the rules follow Scopac” - Scopac attorney Kathryn Coleman
http://www.times-standard.com/local/ci_5565506
Palco's timber assets assessed
John Driscoll The Times-Standard
Eureka Times Standard
03/31/2007
With arguments that made the issue as clear as mist in the redwoods, attorneys battled for a day over whether the Pacific Lumber Co.'s timberlands are a single project that might be reorganized apart from its milling operations.
Lawyers for the noteholders that carry $714 million in debt secured by 210,000 acres of timberland held by Palco subsidiary Scotia Pacific looked to convince a federal bankruptcy judge in Texas that since all of its activities on the land -- and its revenue -- revolve around growing trees, it should be declared a single asset.
Scotia Pacific argued that trees are personal property, not real property, and that the numerous activities of the subsidiary's scientists show the company is too complicated to be deemed a single asset. Its attorneys spent hours extracting testimony from its scientists on every aspect of their efforts, which they claimed are the only way it is allowed to cut trees.
The Times-Standard listened to the Corpus Christi U.S. District Court proceeding by teleconference, which was open to the public at the newspaper's Eureka office.
Noteholders' attorney Evan Flaschen asked Judge Richard Schmidt to declare Scotia Pacific a single asset company and let the case move on to the pending brawl over what the timberlands are worth. That will weigh heavily toward whether Palco and its parent company Maxxam keep control of the timber, or whether the noteholders foreclose on it and reorganize.
”Let's bring on the battle that we all know is going to happen,” Flaschen said.
Case law on the subject is limited, especially since Congress in 2005 amended the single asset statute to no longer exclude properties worth more than $4 million. Attorneys were stuck with trying to compare Scopac to apartment complexes and golf courses that have been put through the bankruptcy process.
Scopac attorney Kathryn Coleman said the company's revenues are generated by its 65 employees -- without whose technical expertise it would not be able to satisfy regulators and gain access to the timber. The complex hydrological, biological and geologic studies Scotia Pacific performs also make it a commercial science lab on the cutting edge, she said.
”Scopac doesn't follow the rules; the rules follow Scopac,” Coleman said.
Palco attorney Shelby Jordan added that if Scopac is a single asset, every farm and every oil and gas company would be one, too. The land generates nothing, he claimed, and the situation is not like a landowner who passively holds an investment property while waiting for the market to turn.
Schmidt said that he would guess any farm -- outside the family farm -- is a single-asset entity, since its revenues are derived almost exclusively from the land.
In closing arguments, Flaschen said all the complicated regulatory endeavors on Scotia Pacific's lands are for one purpose only: to grow trees.
”It's amazing to say that a tree growing in the ground isn't real estate,” he said. “Of course it's real estate.”
He added that Palco's stated “doomsday scenario” -- that the noteholders acquisition of the timberlands would mean the mill would be shut down -- is baseless. Palco is a logical buyer for the timber, he said, and there's no reason to expect that the bond holders would shut down a business whose sole revenue is from its trees.
Schmidt took the matter under submission, stopping the hearing on it after one day. He also briefly addressed concerns from attorneys about when he might rule on a request by the noteholders and others to have the case moved to Oakland. He said work on that decision is largely done, and could be filed as early as next week.
John Driscoll can be reached at 441-0504 or jdriscoll at times-standard.com.
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In a message dated 3/31/2007 4:29:50 PM Pacific Daylight Time, aeb@inreach.com writes:
”Scopac doesn't follow the rules; the rules follow Scopac” - Scopac attorney Kathryn Coleman
http://www.times-standard.com/local/ci_5565506
Palco's timber assets assessed
John Driscoll The Times-Standard
Eureka Times Standard
03/31/2007
With arguments that made the issue as clear as mist in the redwoods, attorneys battled for a day over whether the Pacific Lumber Co.'s timberlands are a single project that might be reorganized apart from its milling operations.
Lawyers for the noteholders that carry $714 million in debt secured by 210,000 acres of timberland held by Palco subsidiary Scotia Pacific looked to convince a federal bankruptcy judge in Texas that since all of its activities on the land -- and its revenue -- revolve around growing trees, it should be declared a single asset.
Scotia Pacific argued that trees are personal property, not real property, and that the numerous activities of the subsidiary's scientists show the company is too complicated to be deemed a single asset. Its attorneys spent hours extracting testimony from its scientists on every aspect of their efforts, which they claimed are the only way it is allowed to cut trees.
The Times-Standard listened to the Corpus Christi U.S. District Court proceeding by teleconference, which was open to the public at the newspaper's Eureka office.
Noteholders' attorney Evan Flaschen asked Judge Richard Schmidt to declare Scotia Pacific a single asset company and let the case move on to the pending brawl over what the timberlands are worth. That will weigh heavily toward whether Palco and its parent company Maxxam keep control of the timber, or whether the noteholders foreclose on it and reorganize.
”Let's bring on the battle that we all know is going to happen,” Flaschen said.
Case law on the subject is limited, especially since Congress in 2005 amended the single asset statute to no longer exclude properties worth more than $4 million. Attorneys were stuck with trying to compare Scopac to apartment complexes and golf courses that have been put through the bankruptcy process.
Scopac attorney Kathryn Coleman said the company's revenues are generated by its 65 employees -- without whose technical expertise it would not be able to satisfy regulators and gain access to the timber. The complex hydrological, biological and geologic studies Scotia Pacific performs also make it a commercial science lab on the cutting edge, she said.
”Scopac doesn't follow the rules; the rules follow Scopac,” Coleman said.
Palco attorney Shelby Jordan added that if Scopac is a single asset, every farm and every oil and gas company would be one, too. The land generates nothing, he claimed, and the situation is not like a landowner who passively holds an investment property while waiting for the market to turn.
Schmidt said that he would guess any farm -- outside the family farm -- is a single-asset entity, since its revenues are derived almost exclusively from the land.
In closing arguments, Flaschen said all the complicated regulatory endeavors on Scotia Pacific's lands are for one purpose only: to grow trees.
”It's amazing to say that a tree growing in the ground isn't real estate,” he said. “Of course it's real estate.”
He added that Palco's stated “doomsday scenario” -- that the noteholders acquisition of the timberlands would mean the mill would be shut down -- is baseless. Palco is a logical buyer for the timber, he said, and there's no reason to expect that the bond holders would shut down a business whose sole revenue is from its trees.
Schmidt took the matter under submission, stopping the hearing on it after one day. He also briefly addressed concerns from attorneys about when he might rule on a request by the noteholders and others to have the case moved to Oakland. He said work on that decision is largely done, and could be filed as early as next week.
John Driscoll can be reached at 441-0504 or jdriscoll at times-standard.com.
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1.23.2007
Rule 5-120. Trial Publicity
Rule 5-120. Trial Publicity
(A) A member who is participating or has participated in the investigation or litigation of a matter shall not make an extrajudicial statement that a reasonable person would expect to be disseminated by means of public communication if the member knows or reasonably should know that it will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter.
(B) Notwithstanding paragraph (A), a member may state:
(1) the claim, offense or defense involved and, except when prohibited by law, the identity of the persons involved;
(2) the information contained in a public record;
(3) that an investigation of the matter is in progress;
(4) the scheduling or result of any step in litigation;
(5) a request for assistance in obtaining evidence and information necessary thereto;
(6) a warning of danger concerning the behavior of a person involved, when there is reason to believe that there exists the likelihood of substantial harm to an individual or the public interest; and
(7) in a criminal case, in addition to subparagraphs (1) through (6):
(a) the identity, residence, occupation, and family status of the accused;
(b) if the accused has not been apprehended, the information necessary to aid in apprehension of that person;
(c) the fact, time, and place of arrest; and
(d) the identity of investigating and arresting officers or agencies and the length of the investigation.
(C) Notwithstanding paragraph (A), a member may make a statement that a reasonable member would believe is required to protect a client from the substantial undue prejudicial effect of recent publicity not initiated by the member or the member's client. A statement made pursuant to this paragraph shall be limited to such information as is necessary to mitigate the recent adverse publicity.
(A) A member who is participating or has participated in the investigation or litigation of a matter shall not make an extrajudicial statement that a reasonable person would expect to be disseminated by means of public communication if the member knows or reasonably should know that it will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter.
(B) Notwithstanding paragraph (A), a member may state:
(1) the claim, offense or defense involved and, except when prohibited by law, the identity of the persons involved;
(2) the information contained in a public record;
(3) that an investigation of the matter is in progress;
(4) the scheduling or result of any step in litigation;
(5) a request for assistance in obtaining evidence and information necessary thereto;
(6) a warning of danger concerning the behavior of a person involved, when there is reason to believe that there exists the likelihood of substantial harm to an individual or the public interest; and
(7) in a criminal case, in addition to subparagraphs (1) through (6):
(a) the identity, residence, occupation, and family status of the accused;
(b) if the accused has not been apprehended, the information necessary to aid in apprehension of that person;
(c) the fact, time, and place of arrest; and
(d) the identity of investigating and arresting officers or agencies and the length of the investigation.
(C) Notwithstanding paragraph (A), a member may make a statement that a reasonable member would believe is required to protect a client from the substantial undue prejudicial effect of recent publicity not initiated by the member or the member's client. A statement made pursuant to this paragraph shall be limited to such information as is necessary to mitigate the recent adverse publicity.