Humboldt County, California
The Pacific Lumber Company filed for bankruptcy to rid itself of its substantial debt ($700 million) on a 220,000-acre redwood forest property located in Humboldt County. This property received national media attention from the tree-sitting marathon of Julia Butterfly Hill and the subsequent Headwaters Agreement that preserved 7,500 acres of old-growth redwood forest. Part of Pacific Lumber’s reorganization plan involved converting nearly 23,000 acres of the forest into a “ranch preserve” (i.e., rural residential subdivision) and also selling lands restricted from logging by the Headwaters Agreement to conservation organizations. Several other reorganization plans were offered at court.
EPS was engaged with the Pacific Lumber bankruptcy, serving the indentured trustees’ (creditors’) legal team as an expert witness. In addition to reviewing the substantial case file, EPS conducted market and feasibility analysis of the Debtor’s Reorganization Plan that involved conversion of a portion of the property to a rural estate subdivision. EPS also prepared testimony regarding the proposed reorganization plans for the U.S. Bankruptcy Court. Ultimately, the reorganization plan offered by Mendocino Redwoods Company was selected. This ruling constituted a major environmental victory and an opportunity to establish a sustainable management plan for the Pacific Lumber holdings.