By Cornelia de Bruin

Triplicate staff writer

Effects of Pacific Lumber Company's recent bankruptcy filing are likely to trickle down through Crescent City.

andquot;We're all in the same industry,andquot; said Dennis Holt, long-time owner of Holt Transportation Inc., which hauls timber. andquot;It would affect the whole county, it's a trickle-down effect.andquot;

Pacific Lumber filed for voluntary protection under Chapter 11 on Jan. 19 in Corpus Christi, Texas. Included in the filing were its subsidiary companies Scotia Pacific Company LLC, Britt Lumber Co., Inc., Scotia Development LLC, Salmon Creek LLC and Scotia Inn Inc.

The most common form of bankruptcy, the action frees a company from threat of its creditors' lawsuits.

Company officials blamed their andquot;liquidity crisisandquot; on regulatory limitations on timber harvest imposed on them.

The limitations, andquot;have significantly reduced revenues while also increasing timber harvesting costs,andquot; a Pacific Lumber press release stated. Regulations kept the companies' timber harvest volumes and cash flows andquot;substantiallyandquot; below the levels that it needed.

andquot;We declared bankruptcy to protect ourselves and to preserve and restructure our company,andquot; said Andrea Arnot, Pacific Lumber's communications director. andquot;We are restructuring our finances and hope to emerge (from the situation). We are not for sale.andquot;

Pacific's employees are being paid and receiving their benefits andquot;as usual,andquot; she added. If the company does not prevail in its efforts, the bankruptcy will affect about 400 employees.

The effects of the bankruptcy declaration will be less obvious, but palpable in Crescent City.

Hambro Forest Products buys the chips it uses in particle board manufacturing from Pacific Lumber. They are used at its Humboldt Flake Board Panels company located in Humboldt.

andquot;I don't like it when the ingredients are impacted,andquot; said Dwayne Reichlin, who oversees Hambro's operations and is president of Snoozie Shavings, Inc.

Pacific Lumber's bankruptcy would halve the number of mills for which Holt Transportation hauls.

andquot;It makes our opportunities for hauling much less,andquot; said Jeanne Holt, who co-owns Holt Transportation with her husband, Dennis.

It would leave only Green Diamond's Simpson Mill.

andquot;Any time you lose a big player, it puckers you up,andquot; she said, referring to the industry impact.

Reichlin anticipates the bankruptcy announcement will have effects beyond the Humboldt/Del Norte County line.

andquot;I would expect the PalCo (Pacific Lumber companies) thing will mean the environmentalists have put 600-700 people out of work during the last 10 years,andquot; Reichlin said. andquot;I consider myself an environmentalist because our company recycles (forest materials.andquot;)