July 29th 2008

Eureka Reporter
July 29, 2008

PALCO President offers employees best wishes

After 150 years of logging and milling operations in the county and 18 months of contentious battling in federal bankruptcy court, the Pacific Lumber Co. has all but come to an end.

PALCO attorney Katherine Coleman indicated in court Tuesday that all documents have been signed that are necessary to implement the court-approved reorganization plan put forward by Mendocino Redwood Co. and PALCO creditor Marathon Structured Finance Fund.

Under the plan, PALCO's 210,000 acres of land, the historic company town of Scotia and the company's various mills will be transferred over and run by MRC and Marathon.

PALCO and its sister companies will be consolidated into a single timber company to be called Humboldt Redwood Co., which MRC officials said will begin immediately to operate the timber operations under a more conservative harvest model that will eliminate conventional clear cutting and old-growth redwood logging.

George A. O'Brien, PALCO President and Chief Executive Officer offered his best wishes to to employees in a memo circulated in Scotia Tuesday afternoon.

"Fellow Palco Employees,

This morning the Fifth Circuit court denied reconsideration of a last-minute stay request by SCOPAC and the Noteholders and, as a result, the acquisition of PALCO and SCOPAC will occur sometime today.

PALCO has had a long and proud history, and all of you have played a significant role in that history. Many of you have parents or even grandparents who also worked at PALCO. Even though the last few years have not been the best for PALCO, I hope you will always be proud of having been a part of this great company. I am proud that I had the chance to work with you the last two years, and I wouldn't trade my time at PALCO for anything.

It's often an overused phrase, but change is the one constant we all deal with, and things will certainly change for PALCO. When MRC takes over, the new company will be known as the Humboldt Redwood Company, but it will always have a PALCO heart.

I wish all of you the absolute very best. If you stay with Humboldt Redwood or the Town, I know you will give it your all, because that is what you have always done.

So good luck. Stay proactive and stay on the bright side of things, because PALCO has a great future ahead."