Maxxam, Scotia Pacific to meet with timber noteholders as likely default nears

By Ted A. Knutson

Washington, June 13 - Representatives of Maxxam Inc. and its wholly owned Scotia Pacific LLC unit are scheduled to begin confidential meetings Tuesday with advisers for holders of Scotia Pacific's $750 million in principal amount of timber notes as an anticipated default on a July 20 interest payment nears, according to an 8-K filing with the Securities and Exchange Commission.

Maxxam said it is "likely" funds will not be available to pay the $27.9 million in interest due that date. The company blames regulatory bottlenecks for its projected inability to harvest enough Scotia Pacific timber for the interest due.

The parent company said Scotia is looking into restructuring the notes and other avenues to try to make the interest payment. Maxxam also repeated its warning that Scotia Pacific may have to declare bankruptcy.

Maxxam is a Houston-based forest products and real estate firm.

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