Almost three months after the Fisher family – founders of the GAP retail empire – announced a takeover bid for bankrupted forestry firm Pacific Lumber, the deal has been finalised.
Through the family’s Mendocino Redwood Company, and in partnership with hedge fund Marathon Asset Management, the Fishers beat the likes of Harvard University’s endowment fund, a wealthy Texas banker and PALCO’s parent firm Maxxam Inc.
The final deal for an undisclosed sum, which included payment of defaulted debt to Pacific’s creditors to the tune of $600 million, will help to restore industrial forestlands to the region in a sustainable way.
The bid has been plagued by resistance from disgruntled lenders, led by the Bank of New York Mellon Trust, who oppose the deal. As recently as this week, lenders were seeking to block the transaction in US Bankruptcy Court in Corpus Christi, Texas and a US District Court in Louisiana.
Judge Richard Schmidt in Corpus Christi refused to stop the takeover and reminded lenders that they would be in contempt of court if they failed to comply with his order. Lenders argued that the deal effectively meant that both the land and the town were being sold at bargain-basement prices.
For decades, widespread criticism had been levelled at Pacific Lumber for its logging practices under the ownership of Texas company-based Maxxam Inc. Mendocino Redwood intends to restructure the company in a more eco-friendly manner, a plan that has won support from environmentalists and state officials.
The timber firm’s name will be changed to Humboldt Redwood Co.
GAP founders bid to save Californian forest