Gap family offers millions to help revive Humboldt logging firm (Pacific Lumber)

[Kadie]

Gap family offers millions to help revive Humboldt logging firm
Tom Abate, Chronicle Staff Writer

Saturday, December 22, 2007

The San Francisco family that founded the Gap has promised to invest $200 million in a plan to revive the bankrupt Pacific Lumber Co. and restore its heavily logged redwood forests - but only if a federal judge in Texas evicts its current owner, Houston financier Charles Hurwitz and his Maxxam Corp.

The dramatic proposal backed by the clan of San Francisco billionaires led by Donald and Doris Fisher, was aired Friday in federal Bankruptcy Court in Corpus Christi, Texas, where Pacific Lumber sought Chapter 11 protection in January after missing a payment on about $750 million in bonds.

That debt is a legacy of the financing Maxxam secured in 1986, when former junk-bond king Michael Milken helped Hurwitz acquire Pacific Lumber in one of the leveraged buyouts of the 1980s.

To pay that buyout debt, Maxxam greatly increased Pacific Lumber's harvest of redwoods, sparking a spate of tree-sitting and other environmental protests during the past two decades.

Not until April will the Texas Bankruptcy Court decide who gets to own what in this complex case. But the environmentalists who have long been Maxxam's most-vocal critics welcomed the Fisher plan to have one of the family's current holdings, the 9-year-old Mendocino Redwood Co., essentially clone itself to take over Pacific Lumber.


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