Sunday, February 3, 2008
Photo: View of Fern Gully Treesit Village from Garfield Elementary
Agreement paves way for PALCO flood suit to come back to county
By NATHAN RUSHTON
The Eureka Reporter
Published: Feb 1 2008, 10:31 PM ·
Updated: Feb 2 2008, 12:55 AM
A federal bankruptcy judge approved an agreement Friday between the Pacific Lumber Co. and a creditors’ group that settles millions inpotential civil damages for $1.Judge Richard Schmidt signed the agreement in a quick hearing Friday morning, which has been well-received by PALCO attorneys and is viewed by the claimant’s attorney as a way to get the case out of Texas and back ontrack for a trial in Humboldt County.The damage claims stem from three consolidated lawsuits filed in HumboldtCounty Superior Court in 2002 and 2004 by 60 Freshwater Creek and Elk River residents who live downstream of PALCO’s timberlands. The residents were seeking approximately $100 million in claims againstPALCO and Scotia Pacific Co. from alleged damages from their logging activities.The agreement leaves the door open for the litigants to pursue the lawsuit against PALCO parent company MAXXAM and its owner Charles Hurwitz, as well as PALCO and SCOPAC’s insurers.The flood claims lawsuit was scheduled to proceed to trial by Novemberthis year, but was drawn into PALCO’s bankruptcy proceeding after the company filed for Chapter 11 bankruptcy in Texas in January last year.The previous federal bankruptcy court order that halted the flood claims trial from proceeding was scheduled to be lifted Friday, but the a new“stay” will remain until after a confirmation of the plan, or June first,whichever comes first.“We think that is a major improvement,” PALCO attorney Nathaniel Holzertold the court, referring to the amended agreement. Eureka attorney Bill Bertain, who represents the 60 claimants, said Friday following the hearing that he was pleased with the outcome. Bertain said the goal of the agreement he drafted with the help of the Unsecured Creditors Committee was to avoid subjecting his clients to the costly proceedings in Texas where the bankruptcy court would have estimated the value of the cases and settled them with no money likely to come from the bankrupt company.“It will be better to pursue this in Humboldt County, rather than in Texas,” Bertain said. Frank Bacik, vice president and general counsel for PALCO, told The Eureka Reporter previously that the company would have prevailed if the cases against them went to trial.