Pacific Lumber Company - Environmental Issues

Environmental Issues

Under pressure from environmental activists, the company considered selling 6,000 acres (24 km²) of mostly old growth redwoods for $300 million to protect the marbled murrelet, spotted owl, and other old growth dwellers. As required by regulatory authorities, buffer zones have been further developed around rivers to prevent erosion and maintain animal habitats, but the Eel River, the region's major waterway, has been considerably damaged as a result of more than 150 years of logging activity, not all of which is the result of PALCO operations. In 1999 PALCO agreed to American activist Julia Butterfly Hill's requests to create a 3-acre (12,000 m2) buffer zone around a 600 year old growth redwood named Luna in exchange for leaving the tree, as she had been living in it for just over two years. Though someone vandalized the tree during the process, it survives to the present.

In 2003, the Company was sued civilly, by the District Attorney of Humboldt County, for fraud and violations of the California Business and Professions Code. The suit was predicated on the allegation that PALCO had affirmatively represented that its timber operations would have a similar environmental impact across all of its land holdings, when in fact there were wide variances and effects on differing watershed environments. The suit was ultimately dismissed by a California Superior Court Judge, but was later appealed to the California Court of Appeal. In January 2008, the California court of Appeal for the 1st district upheld the trial court's dismissal of the litigation, and the suit is for all practical purposes over. During the pendency of this litigation MAXXAM filed for Bankruptcy. Reports indicate that the family that owns the GAP Stores who are already investors in timber lands in Mendocino county, just south of Humboldt county have submitted a proposal to take over PALCO to the Bankruptcy court in Corpus Christie, TX. Environmentalists hailed the move as being a vast improvement on the increased logging approach by Charles Hurwitz and MAXXAM.