Pacific Lumber seeks deal to cut debt

[Kadie]

Pacific Lumber seeks deal to cut debt
Wednesday, August 3, 2005

By MIKE GENIELLA
THE PRESS DEMOCRAT



Citing a crushing debt load, Pacific Lumber Co. on Tuesday outlined a plan to seek bankruptcy protection while turning over controlling interest in its North Coast timberlands to anxious creditors.

The company wants to give up 90 percent interest in its 217,000 acres of redwoods in return for bondholders agreeing to cut the current $705 million debt to $300 million.

"We're willing to give up majority ownership in the timberlands to keep operating," Pacific Lumber spokesman Chuck Center said.

Tuesday's developments are the most serious surrounding the financial fate of Pacific Lumber since it was acquired in 1986 by Texas financier Charles Hurwitz. The company controls the largest and most valuable stands of redwoods in the world along a slice of coastal Humboldt County where timber and environmental interests have clashed for two decades.

more...
http://www1.pressdemocrat.com/apps/pbcs.dll/article?AID=/20050803/NEWS/508030317/1033/NEWS01

[texastoast]

1. So how will the redwoods fare?

I suppose we will just be fighting different assholes now instead of Hurwitz?

[Xithras]

2. It'll get worse actually.

The creditors aren't agreeing to take the trees in lieu of cash out of charity, but because they see it as the quickest route for getting their money back. There are three likely outcomes here, and only one is good.

First, the creditors may sell the trees to another lumber company, or break it up and sell it piecemeal to multiple companies. Either way, those companies will be under enourmous pressure to justify their purchases and will try to log them as quickly as possible.

Second, the creditors may sell the land to a conservation group or the state. Unfortunatly, California isn't in any position to buy $400 million dollars worth of forest, and I don't know of any conservation groups that have that kind of cash.

Third, the creditors may try to lease the land back out to logging companies including PL. If the creditors look at it as a long-term investment, they may simply lease logging rights to these companies in exchange for a regular income. This is the same situation as the first, but now the pressure will be on the creditors to lease the land as quickly as possible.

[texastoast]

4. Nature Conservancy?

Or is it all just too expensive, national heritage be damned.

[bemildred]

3. Let's just disembowel Hurwitz and let the creditors eat the entrails.

:puke:

[Oerdin]

5. The main reason the creditors would take this offer

is because if he goes to bankruptcy court they'd get even less. I'd like to see the few stands of old growth redwoods that remain recieve complete protection but the state is broke so it won't be making any new state parks while Bush hates everything which is green so no new federal parks will be created.

[bemildred]

6. Hey, they want their money, I know that, so what?

They take the "risk" for the "reward". A lot more people than a few "investors" have already been screwed, in more ways than I care to count here. The real question is what is the sensible, honest, and forward looking thing to do now? How about it we try to go back to running a sustainable lumber business that creates a few stable, well-paying jobs? Humboldt County could use that.

The state is not broke BTW, just badly governed.

[Oerdin]

7. No question about being badly governed

What we Democratic voters are going to have to accept is that we control the State Assembly and the State Senate so our party, as it is currently functioning, is most certainly part of the problem or at least certain members are. I'm not saying Republicans would do better but I am saying we need to be less of partisan hacks and more of objective voters who find the best candidate for a given office. That is especially true in the primary season. I am firmly convinced that the theoretical ideal candidate would never make it through the primary system since both parties have primaries which are essentially controlled by special interests.

As a social progressive I like the social policies we have here in California and believe we should be expanding them where economically & politically possible, however, as a fiscal conservative I believe we should not be saddling future generations of Californians with a large state debt. We need a balanced budget and politicians who will make the tough choices about what to cut or to raise taxes if programs really are in the public interest. We have to many lily livered cowards who tell people we can cut taxes, increase spending, and never ever make a hard choice. That's bad government; it was bad when Reagan did it, it's bad when Bush does it, and it is bad when Democrats in California do it. Only we can fix our party and we need to so we can start leading by example.

[bemildred]

8. Agreed. Welcome to DU (Don't believe I've run into you before). nt