Wednesday, October 17, 2007

Next Hearing On Timberland Ordinance

I mistakenly wrote in the last post that the next public hearing on this would on the 23rd.

If I remember correctly the next hearing on the ordinance was scheduled to occur after Judge Schmidt hears arguments for and against allowing PL's reorganization plan to continue as the exclusive plan. That way the temporary ordinance would still be in effect while Judge Schmidt is considering the reorg plan. The judge may allow the creditors (and maybe others?) to submit thier own reorganization plan at this point.

I'm guessing that the descision by Schmidt will have a big effect on the outcome of the next meeting. Hopefully he allows alternative reorganization plans to be considered.

The timber note holders represented by the Bank of New York just filed thier statement arguing that PL's reorg plan is unrealistic.

Below are excerpts from todays article by John Driscoll;

”The Redwood Ranch residential development, proposed to be in the middle of the debtors' timberlands, has no realistic possibility of ever being completed,” the bank writes. “Existing federal, state and local environmental regulations, endangered species protections and land use restrictions, and the debtors' antagonistic history with each of the decision making bodies, prevent any realistic possibility of obtaining the necessary permits and approvals to realize this speculative venture.”

Palco will come out of the planned restructuring with more debt that it already has, the bank's attorneys write. In order for the plan to work, the noteholders write, Palco must sell 6,600 acres of marbled murrelet reserves for more than $300 million within three years, and sell the Redwood Ranch parcels for more than $700 million within seven years, a prospect they doubt will be realized.

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