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Palco Investor Suit Payout Begins

Ten years after the first shareholder suit claiming Texas financier Charles Hurwitz and other Wall Street players committed securities fraud in the 1985 takeover of Pacific Lumber Co., Scotia, Ca., $150 million in payments is being distributed to investors across the country.

Amounting to the fourth largest securities litigation settlement in the nation's history, checks range from $200 to over $l million, with recipients including retired mill hands, former company executives, local investors and large institutional shareholders.

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Paying into the settlement fund were defendants Michael Milken, Ivan Boesky, Drexel Burnham Lambert, Salomon Brothers, Palco's parent Maxxam Inc. and insurance companies representing other defendants, including the former Palco board.

All investors recorded as Palco shareholders on Sept.27,1985, are entitled to $10 for each share held, under terms of the settlement which was agreed upon l9 months ago. Most will receive less than $10,000, but a few institutional investors, such as Chase Manhattan National Bank. will receive more than $1 million.

Many recipients are longtime company employees who participated in a company stock-option plan before the takeover, including some vocal defenders of the takeover. who nonetheless filed claims as allowed under terms of the settlement.

The original class action lawsuit, later expanded by law firms in San Francisco, Chicago and New York to include other issues and defendants, accused Maxxam, Milken, Boesky and Drexel Burnham of conspiring to purchase Palco for less than 507o of its actual value. The suit accused Salomon Brothers of providing bad advice to Palco's directors, who acquiesced to Hurwitz's takeover demands even though the company's by-laws contained anti-takeover provisions.

Canadian Timber Pact Near

The U.S. and Canadian governments are completing a timber trade pact that would raise the price of Canadian softwood lumber.

The proposed agreement is designed to stave off threatened trade action against Canadian lumber firms