Pacific Lumber purchased by Gap family
Pacific Lumber Co. (Palco), the troubled California logging firm that filed for bankruptcy protection in 2007, has been purchased by Mendocino Redwood, a neighboring timber company owned by the San Francisco family that founded the Gap clothing chain, headed by husband and wife Donald and Doris Fisher. The $600 million deal, approved by a federal court in Corpus Christi, Texas, on July 30, will give Mendocino Redwood control of 210,000 acres of redwood and Douglas fir timberlands, as well as a sawmill in Scotia, Calif.
Mendocino Redwood Co., based in Ukiah, Calif., owns and manages 228,000 acres of timberland just south of the Palco lands. All of its land is certified by the Forest Stewardship Council. Mendocino said it plans to change Palco’s name to Humboldt Redwood Co. and apply for FSC certification for Palco’s forestland, which is currently certified under the Sustainable Forestry Initiative (SFI) program.
Palco was purchased by a Houston financier in 1986, and the company’s subsequent logging practices, particularly in old growth redwood forests, sparked a battle with environmentalists that lasted for two decades. Overdue bonds and logging restrictions eventually forced Palco into Chapter 11.
Competing reorganization plans have been battling for months over Palco’s fate, and a group of bondholders made a last ditch attempt in federal appeals court to block the Mendocino Redwood deal. But the higher court upheld the bankruptcy court’s decision, making Mendocino the new owners of Palco.