łTO ALL PACIFIC LUMBER EMPLOYEE AND PACIFIC LUMBER RETIREE PARTICIPANTS OF: THE 
PACIFIC LUMBER COMPANY RETIREMENT PLAN˛

DATELINE: (Executive Life Group Annuity Certificate Holders)

	SAN FRANCISCO, April 18 -- Following is a letter which was sent today by Pacific 
Lumber Chairman and MAXXAM President John M. Seidl to Pacific Lumber employees 
and retirees:

 	It is MAXXAM's and Pacific Lumber's understanding that Counsel for the 
California Insurance Commissioner is going into court within a day or two to 
modify the order regarding the Executive Life Conservatorship so that payments of 
Executive Life annuities can continue.
 	We fully understand and appreciate your concerns regarding your Executive Life 
annuity, and we are doing everything we can to make certain that your interests 
are protected. The company will not let you suffer any financial hardship as a 
result of Executive Life's problems. You must understand that we do not have all 
the facts regarding the Executive Life situation, which is still clouded with 
great uncertainty, and we do not know what positions the state will take as a 
conservator. Be assured that we are gathering the facts as rapidly and completely 
as possible, that we are cooperating fully with the state conservatorship, and 
that we will continue to do everything we can to protect your interests with the 
conservatorship, Executive Life, and with any and every other appropriate entity. 
Once all the facts are known, we will be in a position to make a decision 
regarding the long-term solution to this complicated problem.
 	In the meantime, should your Executive Life check not be in the full amount 
owed you, MAXXAM and Pacific Lumber will make up the difference as promptly as 
possible. We understand that for a retiree delay can be as devastating as 
non-payment. We will follow this procedure for payments due for May and June and 
will advise you of any change as we become better informed. In the meantime, if 
you encounter a problem with respect to your annuity, please contact Pacific 
Lumber's Steve Hart directly so we can make the appropriate payment.
 	Our willingness to do this does not mean that we are not going to look to the 
conservator and to Executive Life for full performance of their contractual 
obligations under the annuity.
 	It is important for you to understand that, despite what you may have heard or 
read, we have kept each commitment we have made to you in connection with your 
Executive Life annuity. We began monitoring First Executive's condition and 
examining possible alternatives well over a year ago. The situation is not as 
simple as some would have you believe. For instance, the contract with Executive 
Life does not give us the right to cash in that annuity and buy a new one. As you 
know, we had been seeking to transfer Executive Life's annuity obligations to 
another, stronger firm at the time the Insurance Commissioner took Executive Life 
into state conservatorship. My point is that while we have been working hard to 
reach a solution, the issue is very complex and the developments are fast 
changing.
 	I hope that this decision by MAXXAM and Pacific Lumber, which is a major one, 
puts your minds at ease. We value greatly the contribution which each Pacific 
Lumber retiree has made to the health of this fine company just as we value the 
contributions which those presently at work for the company are making. You are 
the reason we are making this commitment.
 	We will continue to keep you fully informed. 

 
Sincerely,

John M. Seidl
Chairman, Pacific Lumber
President, MAXXAM Inc. 


CONTACT: Robert W. Irelan of MAXXAM Inc., 713-267-3722

ORGANIZATION: MAXXAM Inc.; Pacific Lumber Co.

PR Newswire
April 18, 1991, Thursday
SECTION: Financial News