In an odd twist on modern economics, conservationists
want to use the savings and loan debacle to protect the largest
privately owned old-growth redwood grove in the world. The
3,000-acre Headwaters Forest of northern California is owned by
Pacific Lumber, which was a family business until it was taken over
in 1985 by junk bond financier Charles Hurwitz. Hurwitz’s company,
the Houston-based Maxxam Corp., quickly began leveling the forest
to pay off the debt incurred buying Pacific Lumber. Maxxam was also
an owner of United Savings Association of Texas, which went
bankrupt several years ago in one of the most expensive S & L
failures in U.S. history. The Federal Deposit Insurance Corporation
is now deciding whether to pursue a claim of about $500 million
against United Savings. Since that’s roughly what the Headwaters
forest is worth, why not, conservationists ask, trade the debt for
the redwoods? A bill before Congress authorizes the federal
government to buy the Headwaters grove, along with 41,000 other
acres of Pacific Lumber’s redwoods, but it does not address the
question of forgiving the debt for getting the
land.
This article appeared in the print edition of the magazine with the headline Debt for nature swap.
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