Mendocino Redwood Company to Assume Control of Pacific Lumber

Humboldt County, CA - Anticipating a ruling that will mark the end of an extraordinary 22-year era of controversy, Texas bankruptcy Judge Richard S. Schmidt indicated today that he intends to confirm the Reorganization Plan submitted by Marathon Finance-Mendocino Redwood Company ("Marathon/MRC.") in the matter of the Pacific Lumber Co. ("PL") bankruptcy, assuming certain conditions are satisfied

Judge Schmidt's ruling for bankrupt Pacific Lumber Company and its more than two hundred thousand acres of Humboldt County forests, expected to be filed later today, represents progress for Humboldt County, environmental groups say.

After the ruling is filed, within a few weeks the Mendocino Redwood Company will take over Pacific Lumber operations, including logging on lands now held by the Scotia Pacific Company and the Pacific Lumber mill in Scotia. The Environmental Protection Information Center and the Sierra Club have battled Pacific Lumber's destructive logging practices since Texas-based Maxxam Corp took over the timber company 23 years ago.

"At long last, Maxxam is gone," said Sam Johnston, Private Lands Campaigner for EPIC. "This marks a new era for both the people and forests of Humboldt County."

"This is a positive development for the forested watersheds and people of Humboldt County," said Paul Mason with the Sierra Club. "We look forward to working with a company that has a much stronger track record of responsible management than its predecessor."

To protect the ongoing health of the local community, the local economy, and the working forests that comprise the landscape of this region, Sierra Club and EPIC hope to see: 1) no more cutting of old growth, (2) recovery of species habitat, (3) use of selection harvest methods (4) permanent maintenance of timberland, and (5) permanent protection for key resource areas, such as the Marbled Murrelet Conservation Areas.

Sierra Club and EPIC are optimistic that Mendocino Redwood Company can meet these challenges and recover this important area, according to Johnston.

"MRC inherits a landscape that has suffered grievously from more than two decades of serious abuse," said EPIC's Johnston. "We appreciate MRC's background in restoration-focused forestry, and want to work with MRC to build a truly sustainable timber company for the long term. MRC needs to make dramatic changes from Pacific Lumber's practices to fulfill the commitments they have made."

One of the first tasks MRC will face will be to deal with destructive PL logging plans already in the pipeline, such as the disastrous "Railcar" logging plan to clear-cut redwoods next to Humboldt Redwoods State Park. MRC also needs to perform extensive restoration work on damaged watersheds such as Elk River, Freshwater and Bear Creek.

The decision resolves vast uncertainties that had loomed heavily over the bankruptcy proceedings as PL's creditors staked their positions about who should take over Pacific Lumber and its subsidiary, Scotia Pacific. Pacific Lumber's abandoned plan would have subdivided and sold some 21,000 acres of prime timberlands for development. The plan by the largest secured creditors of the company, the "Noteholders," would have entailed a risky auction that could have divided forestland and mill, or forced an inflated price resulting in unsustainable harvest levels.

The MRC Plan comes closest to implementing the standards EPIC advocates for timber management in the Redwood Region. These standards flow from three core principles for timberland management, to: recover high-quality timberland and wildlife habitat for salmon & steelhead and other aquatic, terrestrial, and avian wildlife; recover an economy based on these resources, and full integration of the region's human communities in these efforts.

EPIC & Sierra Club look forward to working with MRC, and are pleased that Judge Schmidt and the bankruptcy court recognized that the MRC plan affords a solid opportunity to realize long-term, sustainable forestry.