The Fisher family – founders of the GAP retail empire – are bidding to purchase a bankrupted US forestry firm. The current bankruptcy trial for The Pacific Lumber Co (PALCO) is pitting the Fishers against Harvard University's endowment fund, a wealthy Texas banker and PALCO's parent firm Maxxam Inc. A final decision is expected next week.
Through their Mendocino Redwood Company, the Fishers and hedge fund Marathon asset management have pledged to inject an initial $225 million into the firm, followed by annual funds of $10 million. Their sustainable business model has even attracted the attention of California governor Arnold Schwarzenegger.
The Fishers' interest stems from their ownership of Mendocino Redwood Company, which was created in July 1998 with a long-term investment by the family and their investment partners. John Fisher, a second-generation family member, is one of the company's directors.
Its publicly declared purpose is to demonstrate that it is possible to restore industrial forestlands as part of a viable business plan. The company's long-term goal is to restore its property to a Redwood and Douglas-fir dominated selectively-harvested forest.
PALCO, which controls over 200,000 acres of California's redwood and Douglas-fir forest, filed for chapter 11 bankruptcy in January 2007 citing "regulatory limitations on timber harvest, which have significantly reduced revenues while also increasing timber harvesting costs."