SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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240.14a-12
MAXXAM INC.
(Name of Registrant as Specified in Its Charter)
AS YOU SOW FOUNDATION, JILL RATNER, THOMAS W. LITTLE
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
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The Rose Foundation for Communities and the Environment
6008 College Avenue, Suite 10
Oakland, California 94618
March 31, 1997
Dear Fellow MAXXAM Inc. Shareholder:
As co-sponsors of a proposal to MAXXAM Inc. shareholders
that will be considered at the upcoming annual shareholder
meeting, we would very much like to meet with you to discuss that
proposal. (A copy of our preliminary proxy statement is
attached.) Our proposal asks the company to:
* Become a willing seller of its Headwaters Forest
properties, seeking to sell or trade all Company properties
within the 60,000 acre Headwaters Forest area in northern
California, to a government agency or conservation organization,
for appropriate consideration, which may include relief from
potential financial liabilities related to pending litigation
(sometimes called debt-for-nature) in a manner consistent with
sound tax planning.
We would also like meet with you to discuss two independent
candidates we have nominated for election to the MAXXAM Inc.
Board as Common Directors: Judge William A. Newsom (ret'd) and
Mr. Richard D. Baum. Under the provisions of the MAXXAM Inc.
Certificate of Incorporation, only common stock can be voted in
election of these two directors. Both Judge Newsom and Mr. Baum
are committed to protecting the interests of MAXXAM Inc. common
stockholders. Short biographies of these two independent
nominees are attached.
Why do we believe that shareholder action is needed to
protect our MAXXAM Inc. investment?
* MAXXAM posted losses in three of the past five years:
$7.3 million in 1992, over $600 million in 1993, and over $122
million in 1994. In the final quarter, 1996, MAXXAM lost money
again: $5.1 million in just three months.
* The FDIC asserts that MAXXAM president and CEO Charles
Hurwitz engaged in a "pattern of deceptive financial reporting
and balance sheet manipulation" in operating United Savings
Association of Texas, an S&L in which the Company had a
significant investment position (Complaint, FDIC v. Hurwitz,
paragraph 16, filed August 2, 1995 in the United States District
Court for the Southern District of Texas, Houston Division),
seeking damages in excess of $250,000,000.
* MAXXAM faces hundreds of millions, possibly billions of
dollars in potential liability in two other legal actions based
on MAXXAM's alleged role in the failure of the savings and loan,
United Savings Association of Texas.
* On February 10, 1996, the California Public Employee
Retirement System, MAXXAM's second largest institutional investor
with 318,400 shares, warned management not to log the Company's
old-growth holdings, or it would risk being "perceived as a
pariah (in the market), unable to easily raise new capital when
needed."
We believe that these problems depress the value of your
MAXXAM investment. In our view, it seems clear that MAXXAM
common shareholders need strong representation on MAXXAM's board
to protect the value of that investment.
Moreover, as we see it, many of MAXXAM's problems stem from
ownership of Headwaters Forest. In our view, the Headwaters
controversy wastes Company resources, depresses stock values,
reduces access to credit and threatens MAXXAM's long-term
success.
* Over the past decade, Maxxam's Headwaters Forest holdings
have triggered 14 lawsuits, countless protests and a recent
boycott of old-growth redwood lumber.
* In 1995, logging operations in one of Headwaters Forest's
six old-growth groves were blocked by federal court order after
protracted litigation -- costing $1,110,344 in plaintiffs'
attorneys' fees above and beyond fees paid directly by MAXXAM and
its subsidiary, Pacific Lumber. Although the Company persisted
in litigating this costly case all the way to the U.S. Supreme
Court, the injunction still stands, rendering commercial value of
this prime grove highly uncertain.
* On October 24, 1996, Standard and Poor's lowered its
rating on certain MAXXAM bonds from B+ to B. Relevant factors
included obstacles facing a pending government land swap for part
of Headwaters Forest.
Along with the other co-sponsor of the "willing seller"
proposal, we believe it is time for MAXXAM to end the Headwaters
controversy by selling or trading all 60,000 acres of Headwaters
Forest.
In our view, MAXXAM can settle all of its potential
financial liabilities in the pending savings-and-loan-related
cases by transferring portions of Headwaters Forest to the
government agencies asserting the claims.
Some people call this a debt-for-nature settlement. We
believe a debt-for-nature settlement is in the shareholders' best
interest, as it could resolve hundreds of millions, if not
billions of dollars in potential S&L liabilities, and end the
long-standing Headwaters controversy at the same time.
Please feel free to call us at (510) 658-0702 if you have
any questions. We will be calling within a few days to try to
find a convenient time for you to meet with us to discuss these
important matters affecting your MAXXAM Inc. investment. Thank
you for your consideration.
Sincerely,
/s/ Jill Ratner /s/ Thomas W. Little
Jill Ratner, President Thomas W. Little, Executive
Director
The following may be deemed to be "participants" in this
solicitation: As
You Sow Foundation, owner of 100 shares of MAXXAM Inc. common
stock, the Rose Foundation for Communities and the Environment,
which does not own any MAXXAM Inc. stock, and Jill Ratner and
Thomas W. Little, president and executive director, respectively,
of the Rose Foundation, who own 100 shares of MAXXAM Inc. common
stock as tenants in common; Ms. Ratner also owns 50 shares as an
individual.
<PAGE>
Independent MAXXAM Inc. Common Director Nominees
William A. Newsom, age 63, is a retired Associate Justice of
the California Court of Appeal and president of Newsom Associates
in San Francisco, California. He is also trust administrator of
the Gordon Getty Family Trust, a trustee of Ronald Family Trust
A, and a director of the Conservation Corporation, Johannesburg,
South Africa. He holds a Master of Arts degree and Juris Doctor
degree from Stanford University. Judge Newsom owns 100 shares of
MAXXAM common stock.
* * *
Richard D. Baum, age 50, is president and chief executive
officer of Care West Insurance Company in Rocklin, California,
and a trustee of the San Francisco Culinary, Bartenders and
Service Employees Pension Trust Fund, Welfare Fund, Education
Fund and Legal Fund. He has served as Chief Deputy Insurance
Commissioner for the State of California; Trustee of Executive
Life Insurance Company in rehabilitation and liquidation; and
Senior Vice President for Administration of Amfac, Inc.,
supervising transition activities in connection with merger of
Amfac, Inc. into JMB Realty Corporation. He holds a Master of
Arts degree from the State University of New York at Albany and
the degree of Juris Doctor from George Washington University,
Washington, DC. Mr. Baum owns 50 shares of MAXXAM common stock.
