Friday, January 19, 2007

Palco Files Bankruptcy

Looks like Palco finally filed for bankruptcy. Why am I not surprised?

The question now is; Which lumber company gets attacked next?

34 Comments:

At 10:28 AM, Blogger Derchoadus said...

Knew it was comming. They've been selling whole logs for 1/4 of the price to other mills. Just milking the last bit of $$$ from the sinking ship. Kinda like the other company Maxxam owned, Alcoa.

 
At 10:37 AM, Blogger Heraldo said...

PL didn't go bankrupt because they were "attacked." They predicted this long ago. It was a business plan. Not good for PALCO, but great for Maxxam.

 
At 11:17 AM, Blogger Pogo said...

"PL didn't go bankrupt because they were "attacked."
heraldo, advise us which parallel universe you inhabit.

 
At 11:19 AM, Anonymous Anonymous said...

Not surprising. This is a strategy of most corporate raiders. Take the cash immediately after the purchase (which they did) and split up the company and milk it for everything until bankruptcy. Sometimes after bankruptcy if it actually ends up clearing debt they just start over again.

 
At 11:35 AM, Blogger Derchoadus said...

Hey, man. It's just buisness.

 
At 11:53 AM, Anonymous Anonymous said...

Folks, this debate has been settled long ago. Heraldo is right. Don't be such tools.

 
At 12:39 PM, Anonymous Anonymous said...

I beg to disagree - Heraldo is a ranting nut job who hates cops and palco.

 
At 1:46 PM, Blogger Anon.R.mous said...

Well, let's see how this does for the unemployment rate in Humboldt County.

 
At 2:10 PM, Anonymous Anonymous said...

Pogo,
When will you people ever get it through your thick skulls?

The good news here is that when they liquidate the land if nature conservancy's can come up with the cash, some of the second growth can be saved into perpetuity.

The bad news, the news the environmentalists have been saying all along now, is that timber as a way of life in Humboldt County is gone. Sustainability was the only option to keep it going.

Pogo, you're like a meth addict. Binging while the getting is good one day, then bitching and blaming the people around you when your baggie is empty. I want to scream for you to wake up but the nightmare is already your life and you don't even know it!

 
At 3:50 PM, Blogger Derchoadus said...

#1 They filed Chapter 11. Which is reorganization.
#2 They're still operating. No one is being let go...except for the ones that got the Xmas Bone-us.
#3 They did this to themselves deliberatly to Maxxamize profit sent to Texass.

It's all a shell game with debt that finally caught up with them. Someones going to have to eat about 400 million in debt, either the creditors or Maxxam, to come outta bankruptcy.

 
At 4:13 PM, Anonymous Anonymous said...

Now thats the silliest damn thing I ever heard. The Nature Conservancy is the largest buyer and seller of land in the world. They have assets in the Billions. They buy for pennies on the dollar ( giving phony promises) and sell at inflated prices to Gov. agency's who for the most part couldn't get the land because the original wouldn't sell to Big Gov. After the NC shell game they always make money and keep the land with the most potential for themselves. The board members are from thr top fortune 500 buisness,with a keen sence of future worth of resource producing land. You are willing cultist if you believe the Redwoods won't be cut in 100 years or so if the NC controls them. In fact if NC has control rest assured the trees are gone as soon as they need them. To learn more about this horrid con on the public go to Range Magazine on web. I'm sorry to burst the bubble of some of you locally that believe, but I have several long time friends in Ag. who have been destroyed by the Nature Conservancy. Dennis Mayo

 
At 4:23 PM, Anonymous Anonymous said...

As an environmental activist working since 1995 on a feasible Native American plan to regain local ownership and control of Palco that enviros like Ken Miller and his partner Bob Martel of Humboldt Watershed Council did their best to scuttle, just as Earth First!, EPIC, Trees Foundation, ISF, all went out of their way to discredit or ignore the Bear River band's Heartlands Project, I can only feel that local enviro activists are responsible for this current situation just as much as Maxxam. Both exploited the old growth trees Palco owned to build their organizational empires up. 20 years of practically non-stop political attack against Palco and Maxxam only made EPIC the richest enviro org in Humboldt County with the biggest operating budget. We all lost, especially Native Americans.

Heartlands is still in the wings but I doubt enviros will ever work with Native Americans when it comes to major environmental challenges like ownership of Palco. Wouldn't want ndns getting the credit for environmental protection when so many white activists in trees and in court are ever so more deserving that honor..

 
At 4:25 PM, Anonymous Mous Anony said...

Employees of the SPI have known this for quite some time. When Red Emmerson passes away, and he is quite up in age, Sierra Pacific will shut down the Manila mill site. The reason it is still operating is because of sentimental value to Red. It is his first mill. When SPI goes, so goes the timber industry.

Why do I see environmentalists clapping their hands uproariously like the SF Chronicle pink section movie critic?

What do we have to replace the timber industry? I know, maybe SunFrost and Holly Yashi can hire on the laid-off workers. (No offense to those fine companies. Just used as an example of contemporary manufacturing industries in Humboldt County.)

 
At 4:30 PM, Anonymous Anonymous said...

Hurwitz is a criminal. Send him to jail with his butt buddies Bush & Cheney & Bob Ney & Duke Cunningham & Tom DeLay, etc.

 
At 5:05 PM, Anonymous Mous Anony said...

From the Chronicle:

Among the company's largest unsecured creditors listed in court papers filed in Corpus Christi were Environmental Protection Information Center, owed $4.3 million, and the United Steelworkers of America, AFL-CIO, owed $1.8 million, both in disputed court judgments.

As seen on SoHum Parlance.


It says a bunch.

 
At 5:54 PM, Blogger Pogo said...

4:30 PM: "Hurwitz is a criminal..."
Now we know the parallel universe. It's the one where Gore won the 2000 election and Clinton was never impeached/or lied.

 
At 6:55 PM, Anonymous Anonymous said...

Ha! Anyone who thinks environmentalists had even the tiniest bit to do with PalCo's financial situation doesn't have a clue. Where have you been living for the last decade? What have you been reading?

 
At 6:56 PM, Anonymous Anonymous said...

Hell, even loggers blame the takeover for PalCo's demise. A once great company brought down by people who don't care.

 
At 9:07 PM, Anonymous Mark Lovelace said...

Humboldt Watershed Council Press Release:


The Pacific Lumber Company (Palco) filed for bankruptcy protection today, after years of speculation as to its financial viability. The bankruptcy includes both Palco and its subsidiary Scotia Pacific Corporation (ScoPac), as well as other subsidiaries Britt Lumber, Scotia Inn, Scotia Development, and Salmon Creek LLC.

Palco has long been burdened by tremendous debt, which made the company unprofitable even at massive rates of harvest. This crushing debt forced the company to ignore science, violate regulations, log unsustainably, destroy the watersheds in which it operates, and to deplete the resource upon which it depends.

Palco’s filing should come as no surprise to anyone familiar with the company’s finances. The company’s debt stands at well over $800 million, yet its collective assets are valued at closer to $540 million. There is simply no way the company could ever get back on a stable footing without doing something to reconcile that massive discrepency. That is what this reorganization should seek to accomplish. Underneath that debt are the makings of a profitable timber company, with the potential for annual profits of $30 million to $40 million per year. Once the burden of that debt is relieved, Palco should be a viable, stable company once again.

Palco would like to claim that this bankruptcy is the result of reduced harvests due to over-regulation, but this is simply not the case. The company’s own filings show that they have been within 2% of their planned harvest rate over the last 6 years. What's more, even that 2% dip was almost entirely due to the company's own actions (The company's stay against the Regional Water Board in 2005 prevented the Board from being able to permit any harvest in Freshwater and Elk River watersheds for a full year.)

Palco’s financial crisis has nothing to do with environmental regulations. Rather it is entirely the predictable result of greed and mismanagement. Palco’s own studies from as far back as 1985 predicted that the company could not sustain it’s voracious rate of harvest for more than 20 years, and that to do so would result in “liquidation of the forest.” (Hammon, Jensen & Wallen report, 1985.)

The company has been over-leveraged for far too long, and it simply could not sustain itself. Quite literally, if the company cut every tree on their land, it would not generate enough cash to pay off the debt. No amount of harvest could save the company.

Palco has long been a lightning rod for the timber industry. The company’s massive, unsustainable logging, its environmental destruction, its hundreds of regulatory violations, and its abusive relationship with the community have created problems for everyone, including other timber companies. The need to reign in Palco has brought down greater regulation upon all timberland owners, large and small. The underlying cause of all of this has been the company’s massive debt, which it has carried since the hostile takeover by Charles Hurwitz and Maxxam in 1985.

The first people to speak up against the takeover were Pacific Lumber Company's employees themselves. In 1985 some 460 employees signed their names to a full page ad in the Times-Standard, saying "We do not believe that this impending takeover is in the best interests of ourselves, the shareholders, or the community in which our company serves."

In all likelihood, the company will continue to operate during reorganization. While sale or conversion of land is a concern, the highest and best use of Palco’s land and its other assets remains timber production. It is in everyone’s interest to see this company finally returned to a position of stability and responsibility, and to make it a company the community can be proud of once again. Who will own the company at that point and under what name is unknown.

 
At 8:36 AM, Blogger Carol Ann said...

Hey, we KNEW this was going to happened ever since the hostile takeover in 1985.

I am curious to see how the annexation of Scotia into Rio Dell is going to play-out. It was stated in this mornings, Times-Standard by that PALCO "balked" at Winzler and Kelly's recommendations that it will cost $24,000,000 to improve Scotia's infrastructure.

Nice coverage in the Eureka Reporter, Mark.

 
At 11:05 AM, Blogger Anon.R.mous said...

Yeah we all knew it was going to happen, it only took 22 years. I remember back then, they said it wasn't going to happen next week, then the week after that...

 
At 5:24 PM, Anonymous Anonymous said...

I hope Mark Lovelace and enviros finally come to the realization that the only feasible way to get Palco back in community hands is through our Heartlands Trust Company which contains the only financial mechanism, our Native American tribally owned and operated worldwide lottery that is capable of absorbing the tremendous debt Maxxam piled onto Pacific Lumber Company.

It remains to be seen if enviros can get past their ego-investment and career advancement ambitions that made them hostile the Heartlands Project when it was under the direction of the Bear River tribal council. We need the help and Humboldt County needs us to keep Palco lands from being subdivided or placed off limits from commercial forestry.

 
At 8:18 PM, Blogger Pogo said...

Re: "Mark Lovelace said...Humboldt Watershed Council Press Release:"

Oh great. Another "press release" from an enviro wacko earth first wannabe "group" without any source given for their statistics, let alone any evidence as to Maxxam's business model other than unsubstantiated accusations. I am willing to to be persuaded, but this "press release" smacks of the tactics formerly used by the late Tim McKay of the North Coast Environment Center.

 
At 11:16 PM, Anonymous Mark Lovelace said...

Pogo, I have spent much of the last 3 years studying Maxxam's, Palco's and ScoPac's 10K, 10Q, and 8K filings with the Securities and Exchange Commission from 1985 through the present. I have also spent a great deal of time digging through ScoPac's 200+ page July 1998 Bond Offering Memorandum, as well as numerous other filings, documents and reports by Palco, ScoPac, and their consultants. I have worked on this issue with analysts from some of the biggest financial institutions in New York, Houston, and Los Angeles, as well as people from the SEC, Dow Jones, and Forbes Magazine.

I do actually know a thing or two about this subject. In almost all cases, the best information comes directly from ScoPac, Palco, or Maxxam.

 
At 6:17 AM, Anonymous Anonymous said...

Mark, then how come you don't know about the fact that there is more standing timber volume now on Palco lands than there was in 1998? You, like EPIC, continually make the claim of Palco "liquidation logging" practices but the board feet volume of standing timber refutes this.

It's time for you and Humboldt Watershed Council to understand that from a true environmental protectionist point of view, your org and EPIC are part of the problem. Conflict of interest in actually resolving the Palco situation: enviros like you need to have Palco, Hurwitz, and Maxxam as enemies in order to solicit funding from grants and donations. This exploitation of conflict for the last 20 years with Palco has cost us all too many old growth trees lost. Add to that the failure of your org to help restore NA ownership of their own ancestral land and I don't see your stepping up as spokesman now as much more of the same deal, exploit the conflict for your own career advancement without helping to resolve it. It gets you lot's of press but what's the point, environmentally if you aren't helping to resolve the problem with the tool the Creator has provided local Native Americans--the Heartlands Project.

Please start to help our organization this time around and repair the damage your HWC partners, Ken Miller and Bob Martel did to the Bear River tribe in 1997-98.

 
At 7:52 AM, Blogger Pogo said...

Mark, You allege to have spent considerable time and effort on the Maxxam, Palco et al project. Do you have a day job, and if so with whom? Are you retained by members (is there a membership list?) of HWC only or by Earthjustice? Have you gathered your data either for or in cooperation with the Humboldt County District Attorney? Can you advise us of the specific laws/regulations these corporate entities have violated and what punishments were administered? Also what punishments were meted out to those committing criminal acts against Palco and the people of Humboldt County by vandals, obstructors and trespassers? Is it a crime to adopt a risky business model (i.e. enter the timber industry in California)? The leveraged hostile corporate takeovers that were common during the 1980s are a mixed success story and rare these days, but the harassment both perpetrated and ongoing on Palco by the District Attorney and the enviros must have been a contributing factor in the decision to file under Chap XI.

 
At 12:40 PM, Anonymous Anonymous said...

Also, Mark, using "the biggest financial institutions in N.Y..,etc, etc." is still not knowing really going on at Maxxam or Palco planning sessions or what's happening on the ground on Palco land as is obvious from not even recognizing the increasing board feet volume that's been steadily going on. Best guesses from outsiders far away from the action are still only guesses.

 
At 8:14 PM, Anonymous Anonymous said...

Thank God, the indians have Steve Lewis, a white man, to speak for them. The indians have not enjoyed such white man love since Shunka Earth First decided to raise money in their name.

A ho, Steve Lewis. Anyone who doesn't follow your directive is obviously an indian hater.

 
At 9:18 PM, Anonymous Anonymous said...

Mark -
Why?

 
At 10:22 PM, Anonymous Anonymous said...

Mark gets paid by Richard Salzman.

 
At 6:47 AM, Anonymous Anonymous said...

8:14pm= Mark Lovelace?

 
At 8:01 AM, Anonymous Mark Lovelace said...

Sorry, but no, no, and no.

 
At 11:05 AM, Anonymous Anonymous said...

And why shouldn't I be a friend of ndns? I've been working with them for over 14 years and my grandkids are a 16th Lakota, proud to say direct descendants of Sitting Bull. So, of course, my heart is with Native Americans and their cause of social justice. It is the same cause that fuels my work with Palestinians. The work is to free the victims of occupation and oppression, to restore justice to the land and its people. It is part and parcel of my religion.

Shunka came close to being on the Lakota shit list. After hearing that he was involved in sweat lodge ceremonies Alfred Bone Shirt, Oglala Sioux, asked me to check around to see what Shunka was up which I did a little bit by asking park rangers where his group was camping but I couldn't find anything conclusive. Lakota are really adamant about washichu using their sacred ceremonies.

 
At 8:17 PM, Anonymous Anonymous said...

whooeee! Man the spirit is strong here. Big thanks out to my man Steve, for making such a clear connection between the plight of Native Americans and Maxxam.Keep up the great work.

 

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