Pacific Lumber files for bankruptcy
Article Launched: 01/19/2007 09:30:35 AM PST
The Pacific Lumber Co. has filed for bankruptcy protection in federal bankruptcy court in Texas.
The company and its subsidiaries, including Scotia Pacific and Britt Lumber Co., cannot pay their debts, according to a news release. Palco claims regulations on timber harvesting have caused a financial crisis and have reduced revenues, leading to the Chapter 11 bankruptcy protection filing.
Palco sued the state in December for breaching the 1999 Headwaters Forest agreement, which transferred 7,400 acres and two smaller groves to the public at a cost of $480 million. It also imposed strict regulations as part of a conservation plan. Water quality agencies also have clamped down on logging in Freshwater and Elk River, in an effort to improve water quality and begin reducing flooding risks.
The failure of the state to live up to the terms of the Headwaters agreement has prevented Pacific Lumber and (Scotia Pacific) from remaining economically viable without restructuring, the release said.