From: Jeff Manning, The Oregonian, Portland, Ore.
Published January 5, 2005 12:00 AM

Portland, Ore.-Based Crown Pacific's Creditors Take Over 522,000 Acres

Jan. 4--Crown Pacific Partners on Dec. 31 transferred 522,000 acres to a new company, Cascade Timberlands LLC, owned by Crown's major creditors.

Portland-based Crown agreed to the transfer as part of its Chapter 11 bankruptcy liquidation, which was approved Dec. 20 by a U.S. Bankruptcy Court judge in Phoenix, Ariz. The land was the last major asset held by Crown, which ceased to exist when it gave up the property.

Two of the largest owners of the new company are John Hancock Financial Services Inc., the Boston-based insurance company, and mutual fund provider TIAA-CREF. Their individual ownership stakes in the company were determined by how much money Crown owed them.

In all, Crown owed its creditors more than $500 million.

Cascade Timberlands will be temporarily managed by Olympic Resource Management, a subsidiary of Pope Resources of Poulsbo, Wash. The properties consist of several tree farms: 293,000 acres in central and southern Oregon; 147,000 acres in the North Cascades of Washington; and 82,000 acres in the extreme northwest corner of Washington's Olympic Peninsula.

Speculation has run high in the industry that Cascade Timberlands will quickly sell off the land. A company official said a sale is an eventual possibility. But the outfit will also explore the possibility of restructuring the company as a publicly held master limited partnership or a real estate investment trust.

"I think there is a real open-mindedness on the Cascade Timberland board as to what route to take down the road," said Tom Ringo, Olympic Resource vice president and chief financial officer.

Cascade Timberlands' first step will be to conduct a thorough inventory of the timber to gain an accurate idea of the land's worth. That should take about nine months, Ringo said.

Some timber will continue to be cut during that process, but at levels significantly reduced from when Crown was in charge, Ringo said.

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