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‘Whistle blower’ claims against Palco settled for six bucks February 7, 2008
The Pacific Lumber Co. announced today the settlement, for six dollars, of the two Qui Tam or “whistle blower” claims originally filed against the company in 2006. Claimants Richard Wilson and Chris Maranto alleged that they had discovered, more than eight years after the Headwaters Agreement was signed, that the Sustained Yield Plan prepared by Palco and approved by the California Department of Forestry relied on incorrect computer modeling and the improper inclusion of hardwoods in certain computations. The claimants, who requested damages totaling approximately $1 billion, also filed “on behalf of” the United States of America and the state of California. After review, however, both state and federal officials declined to participate in the suit. According to the terms of the settlement, each of the two claimants will receive one dollar each from Palco and two subsidiaries, Scotia Pacific LLC and Salmon Creek LLC, for a total of six dollars—an amount Frank Bacik, Palco vice president and general counsel, called “appropriate.” “The Headwaters Agreement was subject to an extraordinary administrative process of examination and review that lasted almost four years and involved some 80,000 pages of documentation detailing the very best information available at the time,” Bacik said. “There was ample opportunity within that process to challenge testimony and exhibits, but these accusations were not raised until eight years later. We’ve believed from the outset that the claims were without basis in law or fact, and this settlement supports that belief.” The SYP has been the subject of two additional lawsuits, one filed by the Environmental Protection Information Center and the other by the Humboldt County District Attorney. In the EPIC suit, the SYP was upheld in 2005 by the California Court of Appeal. The case is now pending before the California Supreme Court. The lawsuit filed by the district attorney was dismissed after Palco’s demurrer was sustained by the trial court without leave to amend, a decision upheld by the California Court of Appeal on Jan. 10. The terms of the settlement are similar to those agreed to in the flood claims suit, which has also been settled by agreement among all parties for one dollar per claim. The rights of third parties outside of the bankruptcy cases will neither be enhanced nor prejudiced as a result of the resolution, according to the agreement. A pro forma approval hearing is tentatively scheduled for Feb. 21. Press Release Courtesy: Heather Muller |
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