284 



of new funds and ^t rid of a floundering: 

 project - all at the expense, a lawsuit al- 

 leges, of Maxxam's shareholders. 



On another occasion, Mr. Hunvitz took 

 advantag^e of an unusual option deal, 

 funded by Maxxam affiliates, that enabled 

 him to increase his Maxxam hojdin^ by 



a third. He paid only SI0.40 a share 

 for about a million shares of stock that was 

 then trading at about S35. Critics com- 

 plained that he should have shared the 

 stock windfall with other holders. Mr. 

 Hurwitz now has 60% voting: control 

 through common and preferred shares. 



Both episodes led to shareholder suits, 

 pending in Delaware Chancery Court. 

 **The deals stink," says Lester C. Houtz, 

 an attorney for Dallas tycoon and Maxxam 

 holder Harold Simmons. "At Mirada, Hur- 

 witz just stuck Maxxam's other sharehold- 

 ers with a white elephant that was about to 

 step right on him.'* Mr. Hurwitz says 

 neither suit has any merit and predicts 

 that the **world-class" Mirada project will 

 pay off big for Maxxam someday. **I don't 

 self-deal. . .and we'd never do anything to 

 the detriment of Maxxam holders," he 

 says. "I am the biggest one." 



Despite the shareholder disputes, Mr. 

 Hurwitz keeps attracting new investors, as 

 displayed in the April refinancing of $510 

 million of Pacific Lumber junk bonds. The 

 bonds were costing more than 12% a year, 

 and payments totaling about S482J million 

 were due beginning in 1993. Many WaU 

 Streeters figured that Mr. Hurwitz would 

 have to sell assets to meet payments: some 

 thought it might signal the unraveling of 

 his empire. 



Mr. Hurwitz proposed spinning off 

 most of Pacific Lumber's land into a new 

 company and offering S360 million of bonds 

 of that new entity. The sole source of 

 repayment: Proceeds from selling logs to 



