WILLIAM G. BERTAIN

Attorney at Law - SB #70163

1310 Sixth Street

Eureka, California 95501

Telephone: (707 443-5078



MICHAEL S. GORDON

Attorney at Law

1225 Nineteenth - N.W.

Suite 470

Washington, D.C. 20036

Telephone: (202) 393-5877





Attorneys for Petitioners







          SUPERIOR AND MUNICIPAL COURT OF CALIFORNIA



                      COUNTY OF HUMBOLDT







DON JOSE THOMPSON, ROSE OLGA             No. 78467

THOMPSON, CHARLES K. BETTIGA, 

and V. CRAIGE McKNIGHT, on behalf        FOURTH AMENDED

of themselves and all others             CLASS ACTION COMPLAINT

similarly situated,



                         Plaintiffs,



	vs.



CHARLES E. HURWITZ; THE PACIFIC 

LUMBER COMPANY (Delaware); MAXXAM 

GROUP, INC.; MXM CORP.; GENE G. 

ELAM; ROBERT B. HOOVER; EDWARD M. 

CARPENTER; JOHN B. BATES; STANLEY T. 

SKINNER; MICHAEL P. HOLLERN; 

MARY LANIGAR; SALOMON BROTHERS INC;

and DOES 1 through 150, inclusive,





                         Defendants.  /



       Plaintiffs, by their attorneys, WILLIAM G. BERTAIN and MICHAEL S. 
GORDON, allege for their Class Action and Complaint as follows:

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                         INTRODUCTION

	1.  This complaint is brought by the plaintiffs herein to hold 
accountable and obtain damages from those defendants respon- sible for  
the  infliction  of great harm upon a  large  number of people and upon 
the certain of communities in Humboldt County in which the injured 
parties live.  As detailed herein, the injuries and harm suffered were 
caused by the fraud conducted by certain of the defendants in bringing 
about the takeover of The PACIFIC LUMBER COMPANY (hereinafter sometimes 
"the old PACIFIC LUMBER", or the "pre-takeover PACIFIC LUMBER", or "the 
pre-HURWITZ PACIFIC LUMBER", or "PACIFIC") in late 1985 and early 1986.  
Harm and injury were also caused by the negligence of  defendants.  The 
allegations made herein are made on information and belief.

	The acts complained of for which damages are sought herein can be 
summarized in three categories:

         I.  THE $60 MILLION PENSION PLAN EXCESS CLAIM

	2.  First, there is the claim for approximately $60 million, plus 
interest, that under the October 9, 1985 Amendment to the Pacific Lumber 
Retirement Plan adopted by the former PACIFIC LUMBER Board of Directors 
should have vested in the then-existing employees and retirees of the 
PACIFIC LUMBER COMPANY because said Pension Plan, as amended, provided 
that the excess in the Retirement fund should so vest in the existing 
employees and retirees in the event control of The COMPANY was obtained 
by any person or entity without the consent of the Board of Directors.  
Consent of the Board was ostensibly obtained on October 22, 1985 by 
defendant CHARLES E. HURWITZ and his corporate entities, but plaintiffs 
herein allege that such control was gained and consent given only because 
of the outrageous acts of fraud and deceit committed by defendants 
CHARLES E. HURWITZ, MAXXAM GROUP, INC., THE PACIFIC LUMBER COMPANY 
(DELAWARE), MXM CORP., and actors, MICHAEL MILKEN, IVAN BOESKY, and 
DREXEL BURNHAM LAMBERT.  Under California Law, fraud vitiates consent.  
Consent was therefore not obtained, by law, and the approximately $60 
million, by law, vested in the then-existing employees and retirees.  
Plaintiffs seek  recovery of said $60 million, plus interest on said 
amount. Plaintiffs further allege under California's concurrent 
jurisdiction, violation by certain  defendants of the  Racketeering  
Influenced  Corrupt  Practices Act (RICO), and thereunder seek triple 
damages for the injury inflicted.  Said wrongful taking of the Retirement 
fund excess further constitutes wrongful interference with plaintiff 
Classes' prospective economic advantage.

  II.  WRONGFUL INTERFERENCE BY DEFENDANTS WITH NON-SHAREHOLDER

            CONSTITUENCIES' PROSPECTIVE ECONOMIC ADVANTAGE      

     

 

	3.  The second category of claims are those hereinafter detailed based 
upon the unique relationship that existed between the old PACIFIC LUMBER 
COMPANY (incorporated in the State of Maine), its Board of Directors, its  
shareholders and its  non-shareholder constituencies.  Plaintiffs allege 
that a contractual relationship existed between the COMPANY and its 
shareholders for the benefit of the COMPANY's non-shareholder 
constituencies as described in various of the COMPANY's corporate 
documents but most particularly in Article Tenth of the Articles of 
Incorporation of The PACIFIC LUMBER COMPANY and as eloquently set forth 
in the January 5, 1981 Proxy Statement, said Article Tenth and said 1981 
Proxy Statement described the unique relationship that the old The 
PACIFIC LUMBER COMPANY and its shareholders had with the COMPANY's 
non-shareholder constituencies, consisting of its employees, its 
retirees, its customers, its suppliers, and the "communities and 
geographical areas in which the COMPANY and its subsidiaries operate or 
are located", is described.  Said 1981 Proxy Statement and the Articles 
of Incorporation of the old The PACIFIC LUMBER COMPANY are attached to 
this complaint as Exhibit "A".  This relationship between The Old, 
Pre-HURWITZ PACIFIC LUMBER COMPANY (Maine) and the non-shareholder 
constituencies created a reasonable expectation of a prospective economic 
advantage for each of the non-shareholder constituencies.

	4.  Plaintiffs herein allege that certain of the defendants negligently, 
and other defendants intentionally, but all wrong-

fully, interfered with the prospective economic advantage that was 
intended to benefit the several non-shareholder constituencies of the old 
PACIFIC LUMBER COMPANY, including its employees, its retirees, and the 
communities and geographical areas in which The COMPANY had its 
operations.  The wrongful acts complained of in this category consist of 
the fraud described above and hereinafter by which the takeover of the 
PACIFIC LUMBER COMPANY was effectu-ated as well by the negligence on the 
part of certain of the defendants.  An example of the economic harm 
suffered is that of the significant loss of employment years that would 
have been enjoyed by 80% of the work force of The PACIFIC LUMBER COMPANY 
which was involved in the harvesting and milling of old growth Redwood.  
Assuming no significant change in the level of environmental regulations 
and enforcement, under the rate of harvesting of the pre-takeover 
(pre-HURWITZ) The PACIFIC LUMBER COMPANY, and based upon the volume of 
old growth timber available to The PACIFIC LUMBER COMPANY, old growth 
employment of approximately 720 employees and their replacements (720 
equals 80% of the approximately 900 employees in 1985) would have been 
provided for approximately 60 years.  Because of the post-takeover 
harvesting rates and practices implemented by CHARLES E. HURWITZ, said 
old growth employment was and has been reduced to 15 to 20 years (from 
1986) and probably less.  Said loss of employment for said employees and 
for the communities in which said employees live constitutes substantial 
harm, both economic and  personal, and  includes the "severe  hardship  
and  emotional injury" contemplated by The PACIFIC LUMBER COMPANY on Page 
4 of the January 5, 1981  Proxy  Statement sent to its shareholders 
setting

forth the basis for adopting the proposed Article Tenth adopted by said 
shareholders.

	5.  As anticipated  by the very  language of the  1981 Proxy Statement 
at page 5 thereof, a destructive long-term impact on the PACIFIC LUMBER 
COMPANY and unfortunate repercussions for ("PACIFIC") non-shareholder 
constituencies did occur as a result of the implementation (by HURWITZ) 
of "a management philosophy which sought a dramatic increase in the short 
term yield of the COMPANY's redwood producing properties.  The political 
and regulatory environment in which PACIFIC LUMBER COMPANY operates has 
been drastically altered as a result of the implementation of exactly 
such a philosophy by defendant HURWITZ with drastic economic consequences 
to several of PACIFIC LUMBER's non-share-

/////

holder constituencies.  And even the safety of employees has been 
jeopardized by defendant HURWITZ' rush to generate profits.

            III.  ECONOMIC DAMAGES FROM HARM DONE TO 

                      ENVIRONMENT BY DEFENDANTS     





	6.  The third category of injury for which recovery is sought herein is 
that of the economic damages resulting from the harm done to the 
environment by the manner in which the harvesting of timber has taken 
place since control of The PACIFIC LUMBER COMPANY was gained by CHARLES 
E. HURWITZ and his myriad corporate entities.  Plaintiffs herein contend 
that a contractual relation-ship existed between PACIFIC LUMBER and its 
shareholders regarding the geographical areas in which the COMPANY had 
its operations, for the benefit of several non-shareholder constituency 
groups, including sport and commercial fishermen, and that said 
contractual relationship created a reasonable prospect of economic 
advantage in said non-shareholder constituency group.  A prime example of 
economic harm is the loss of the economic benefit formerly derived from 
the healthy salmonid  fishery habitat on the YAGER CREEK drainage prior 
to the junk-bond financed and fraud-based takeover of PACIFIC LUMBER by 
CHARLES E. HURWITZ .  Plaintiffs are informed and believe and thereon 
allege herein that said habitat in said YAGER CREEK drainage has been 
nearly wiped out, with little or no prospect of recovery to even a 
minimally healthy condition for decades to come, due to the timber 
harvesting methods utilized by MAXXAM, including clear-cutting, and by 
the rate of harvesting, notwithstanding the public relations effort 
instituted by HURWITZ' controlled entities touting MAXXAM'S release of a 
number of young fish into a portion of said drainage.  As a result of 
excessive cutting and clear-cutting near stream beds, the water 
temperature of a good portion of said YAGER CREEK drainage has been 
rendered too warm for fish to survive and thrive.  Additionally, 
excessive siltation has occurred in the drainage, particularly in the 
areas of juncture of smaller watercourses into larger streams, thereby 
rendering spawning immensely more difficult.  Plaintiffs further allege 
on information and belief that similar environmental damage and waste has 
resulted in identifiable economic loss which has been caused by the 
HURWITZ defendants on most of the other drainages on the timberland owned 
by entities controlled by HURWITZ.

	7.  Following upon the departure of the HURWITZ-controlled PACIFIC 
LUMBER COMPANY from the pre-takeover harvesting practices and rates, the 
communities where The PACIFIC LUMBER COMPANY oper- ates have, as a result 
of the environmentally damaging acts lead- ing to the results complained 
of herein, suffered enormous economic loss, in an amount to be shown at 
trial.  Said communities are the intended beneficiaries of the 
contractual relationship established by the adoption of Article Tenth by 
the PACIFIC LUMBER shareholders and by the January 5, 1981 Proxy 
Statement (Exhibit A).  The prospective economic advantage reasonably 
anticipated by said communities from said contractual relationship has 
declined significantly from defendants' wrongful interference.  The 
economic value of the fisheries described has been  significantly reduced 
due to defendants' actions and omissions, a result reasonably foreseeable 
both by defendants and by the authors of the 1981 Proxy Statement.   

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                        THE PARTIES

	8.  Plaintiffs DON JOSE THOMPSON (hereinafter "THOMPSON" or "DON 
THOMPSON"), ROSE OLGA THOMPSON (hereinafter "ROSE THOMPSON"), CHARLES 
KELLY BETTIGA (hereinafter "BETTIGA"), and V. CRAIGE MCKNIGHT 
(hereinafter "McKNIGHT"), reside in Humboldt County, California.  At all 
times relevant hereto, THOMPSON and BETTIGA were the owners of shares of 
the common stock of the old PACIFIC LUMBER COMPANY and continued to own 
said shares on October 22, 1985.  Plaintiffs bring this action on behalf 
of the non-share- holder class consisting of all residents of Humboldt 
County residing within an as yet to be determined radius of the town of 
Scotia, but certainly no less than a 15-mile radius, in Humboldt County, 
California, being one of the primary geographical areas in which the 
pre-takeover PACIFIC LUMBER COMPANY had its operations and which was one 
of the primary non-shareholder constituencies of the old PACIFIC LUMBER 
COMPANY as set forth in Article Tenth of the Articles of Incorporation of 
The PACIFIC LUMBER COMPANY, described in Exhibit "A", attached hereto.  
Plaintiff  BETTIGA  brings this action also on behalf of the 
non-shareholder constituency class consisting of all employees of the 
pre-takeover PACIFIC LUMBER COMPANY who were employed by the pre-takeover 
PACIFIC LUMBER COMPANY as of October 22, 1985 in its Forest Product 
Division, being another of the primary constituencies of the old PACIFIC 
LUMBER COMPANY under said Article Tenth.  Plaintiffs DON THOMPSON and 
BETTIGA bring this action also on behalf of the non-shareholder 
constituency class consisting of the vested employees and retirees of the 
old PACIFIC LUMBER COMPANY (Maine) also one of the primary "other 
constituencies" under said Article Tenth.  Plaintiff McKNIGHT was, during 
the time period later described herein as the period during which fraud 
and negligence were committed, the Mayor of Rio Dell, the Incorporated 
Municipality adjacent to Scotia.  Plaintiff McKNIGHT brings this action 
on behalf of the residents of the described geographical area who are 
neither employees nor retirees.

	9(a).  GENE G. ELAM was at all times relevant hereto concurrently 
President and Chief Executive Officer of the old PACIFIC LUMBER COMPANY, 
a member of the old PACIFIC LUMBER COMPANY's Board of Directors, and a 
member of the Executive Committee of PACIFIC's Board. 

	9(b).  ROBERT B. HOOVER was at all times relevant hereto Chairman of the 
Board of Directors of the pre-takeover of The PACIFIC LUMBER COMPANY and, 
along with JOHN B. BATES, STANLEY T. SKINNER, MICHAEL P. HOLLERN, and 
MARY E. LANIGAR also served on the old PACIFIC LUMBER COMPANY Board of 
Directors. 

	9(c).  EDWARD M. CARPENTER, now deceased, was at all times relevant 
hereto, Chairman of the Executive Committee of the pre-HURWITZ PACIFIC 
LUMBER COMPANY Board of Directors, a member of said Board of Directors, 
and a resident of Humboldt County.

	9(d).  Hereinafter the persons named in paragraphs 9(a) through 9(c) of 
this paragraph are sometimes referred to as the  "OLD PACIFIC OFFICERS 
and DIRECTORS". 

	9(e).  By reason of their position as OFFICERS and/or DIRECTORS of the 
old PACIFIC LUMBER, and because of their ability to control the business 
and corporate affairs of the old PACIFIC through their stock ownership 
and otherwise, at all times relevant hereto, the PACIFIC OFFICERS and 
DIRECTORS owed PACIFIC's shareholders and PACIFIC's non-shareholder 
constituencies as described in Article Tenth of PACIFIC's Articles of 
Incorporation certain obligations of fidelity, trust, loyalty, and due 
care, were required to exercise their ability to control the corporation 
in a fair, just, and equitable manner, and were further required to act 
in furtherance of the interests of the non-shareholder constituencies 
described in this complaint in accordance with the contractual 
relationship established by the COMPANY and its shareholders with its 
non-shareholder constituencies through the promulgation of the January 
5th, 1981 Proxy Statement and the adoption, by PACIFIC shareholders, of 
Article Tenth of PACIFIC's Articles of Incorporation. 

      10.  Defendant SALOMON BROTHERS, INC. (hereinafter sometimes 
"SALOMON") is a corporation organized under the laws of the State 

of Delaware, and maintains offices in and conducts business in the State 
of California.  

      11.  The defendant known and described herein as the PACIFIC LUMBER 
COMPANY (hereinafter sometimes referred to as "the new PACIFIC LUMBER 
COMPANY" or " HURWITZ' PACIFIC LUMBER" or "defendant PACIFIC LUMBER") was 
incorporated in the State of Delaware in or about 1986 and is so 
incorporated today.  Said new PACIFIC LUMBER COMPANY is new to be 
distinguished from the corporate entity known as The Pacific Lumber 
Company (hereinafter sometimes "the old PACIFIC LUMBER" or "the 
pre-takeover PACIFIC LUMBER" or "the pre-HURWITZ PACIFIC LUMBER") which 
was incorporated in the State of Maine over 90-years ago.  The new 
PACIFIC LUMBER merged with MXM CORP, the corporate entity which CHARLES 
E. HURWITZ utilized to conduct the tender offer for all of the old 
PACIFIC LUMBER COMPANY's stock in the autumn of 1985.  The new PACIFIC 
LUMBER , that is, HURWITZ' PACIFIC LUMBER COMPANY assumed all of MXM 
CORP's liabilities as a result of their merger.   At the relevant times 
described herein, the old PACIFIC LUMBER was engaged in two  principal 
lines of business: the first was the Forest Products operation which was 
located almost exclusively in Humboldt County, California.  The second 
was a cutting and welding products operations which were located 
primarily outside Calif- ornia and consisted of several corporate 
subsidiaries.  Said cut- ting and welding division was sold by a CHARLES 
HURWITZ-controlled  entity in 1987 for $325 million.  The new PACIFIC 
LUMBER is a major provider of California redwood lumber, and its assets 
include the largest U.S. stand of redwoods.  PACIFIC LUMBER owns 
approximately 189,000 acres of timber within Humboldt County, California.  
PACIFIC LUMBER does virtually all of its lumber business in Humboldt 
County and for convenience of the business community, had a corporate 
office in San Francisco, California. 

      12(a).  Defendant CHARLES E. HURWITZ (hereinafter "HURWITZ") is a 
resident of the State of Texas and the Chairman of the Board and Chief 
Executive Officer of MAXXAM GROUP, INC. (hereinafter "MAXXAM").  

      12(b).  Defendant MAXXAM GROUP, INC. and defendant MXM CORP. are 
corporations organized under the laws of the State of Delaware.  
Defendant MXM Corp. (hereinafter sometimes "MXM") was the offeror in the 
tender offer commenced on October 2, 1985 for the takeover of the old 
PACIFIC LUMBER COMPANY by CHARLES HURWITZ and his various entities.  In 
1985 and 1986 MAXXAM GROUP, INC. had its principal offices located in New 
York, New York and had affiliates known as: MAXXAM PROPERTIES, INC.; 
FEDERATED DEVELOPMENT, INC.; MCO HOLDINGS, INC. and numerous other 
related entities.  Hereinafter, HURWITZ, the new PACIFIC LUMBER, MAXXAM, 
and MXM are sometimes collectively referred to as the "HURWITZ 
DEFENDANTS", "HURWITZ", "MAXXAM DEFENDANTS", or "MAXXAM".        

	13.  MICHAEL P. MILKEN is a convicted felon and a resident of Encino, 
California.  At the relevant times complained of herein he was Senior 
Vice-President and Manager of the High Yield Bond Department  ("HYBD")  
of DREXEL, BURNHAM, LAMBERT, INC., MILKEN directed the HYBD and its 
development, underwriting and marketing of high yield securities and 
other services and advised DREXEL customers on financing strategies, 
including strategies for hostile and negotiated mergers and acquisitions.  


                          OTHER ACTORS

      14.  DREXEL, BURNHAM, LAMBERT, INCORPORATED (hereinafter "DREXEL") 
was a broker-dealer in securities and maintains offices and conducts 
business in the State of California.   DREXEL is a convicted felon.

      15.  IVAN F. BOESKY ("BOESKY") presently residing in the United 
States, was at all relevant times herein, the Chief Executive  Officer of 
certain entities, some of which engaged primarily in risk arbitrage, and 
which are collectively referred to herein as the "BOESKY organization,"  
which means any or all of several related companies, partnerships or 
other entities over which, at the times relevant hereto, BOESKY exercised 
investment or operational control.  These included SEEMALA CORPORATION 
and its successor, SEEMALA PARTNERS, L.P., IFB MANAGEMENT CORPORATION  
/////

and its successor, IFB MANAGING PARTNERS, L.P., a registered 
broker-dealer.  BOESKY is a convicted felon.

      16.  BOYD L. JEFFERIES (hereinafter sometimes referred to as, 
"JEFFERIES"), was at all relevant times a resident of California and an 
officer in the firm of JEFFERIES & COMPANY, INC.

      17.  JEFFERIES & COMPANY, INC., is a corporation doing business in 
California.

      18.  DANIEL P. LYNCH ("LYNCH") was a Vice-President in the 
Corporate Finance Department of DREXEL, BURNHAM, LAMBERT, INCORPORATED.    


                         DOE DEFENDANTS

      19.  Plaintiffs are ignorant of the true names and capaci- ties of 
defendants sued herein as DOES 1 through 150, inclusive, and, therefore, 
sue these defendants by such fictitious names.  Plaintiffs will seek 
leave to amend this complaint to allege the true names and capacities of 
said defendants when ascertained.  Each of the fictitiously named 
defendants is responsible in some manner for the occurrences herein 
alleged.

                       JURISDICTION & VENUE

      20(a).  The acts complained of in this complaint are summarily 
described in Paragraphs 1-7 hereof with resulting damages to the class 
members as set forth herein.  The acts complained of were carried out 
through the fraud-based sale of  assets of the old PACIFIC LUMBER through 
a stock purchase and merger put together by means of a series of 
corporate maneuvers which principally involved the land, timber rights, 
town, and mills owned by the old PACIFIC LUMBER in Humboldt County, 
California and which caused substantial damage to the non-shareholder 
classes.

	b.  One or more of the old PACIFIC LUMBER officers and directors had a 
place of residence in Humboldt County and, as hereinafter stated, 
participated in the acts complained of which give rise to this complaint.


           c.  The amount in controversy far exceeds the juris-dictional 
minimum of this Court.

                    CLASS ACTION ALLEGATIONS

      21.  The named plaintiffs bring the Causes of Action individually 
on their own behalf and as representatives on behalf of the classes of 
all persons similarly situated.

      22.  The classes do not include defendants or (any persons, firms, 
corporations, trusts or other persons or their successors or assigns).  
The non-shareholder classes consist of three sub-classes: first, retired 
employees of the old PACIFIC LUMBER COMPANY (Maine); second, employees of 
the old PACIFIC LUMBER COMPANY (Maine) as of October 22, 1985;  and 
third, non-defendant residents of Humboldt County either residing within 
a 15-mile radius of Scotia, California or otherwise reasonably likely to 
have enjoyed or possessed a prospective economic advantage from the 
continued operation of the old PACIFIC LUMBER COMPANY under the 
principles and philosophy enunciated in the 1981 Proxy Statement.  A 
subclass of the third class consists of the sports and commercial 
fishermen affected by the acts complained of herein.  These three classes 
constitute the primary "other constituencies" of THE PACIFIC LUMBER 
COMPANY as set forth in Article Tenth of the Articles of Incorporation of 
THE PACIFIC LUMBER COMPANY.

      23.  There is a well-defined community of interest in the legal and 
factual questions affecting the parties to be  represented.  The 
questions of law and fact common to the classes claims predominate over 
questions which may affect individual class members.  The predominant 
questions of law and fact common to the classes include, but are not 
limited to, the following:  

Whether the HURWITZ defendants wrongfully obtained the roughly $60 
million  excess in the old PACIFIC LUMBER Retirement Fund (hereinafter 
sometimes the "PL Pension Fund") through fraud; whether said acts 
constituted the tort of conversion; whether  certain of the defendants 
were negligent in the performance of their duties to the non-shareholder 
constituencies of the old PACIFIC LUMBER COMPANY; whether the HURWITZ 
defendants wrongfully interfered with the prospective economic advantage 
of the classes through acts of fraud and the subsequent committing of 
waste; whether the acts of the defendants have resulted in economic harm 
by damage caused to the environment; whether a contractual relationship 
existed between the old PACIFIC LUMBER COMPANY and the Classes; whether a 
third-party beneficiary relationship existed between of the old PACIFIC 
LUMBER COMPANY and the Class or Classes; whether defendants participated 
in, conspired in, or aided and abetted a scheme to acquire the assets of 
the old PACIFIC LUMBER at less than value, enriching themselves at the 
expense of, and without sufficient consideration of, the old PACIFIC 
LUMBER's non-shareholder constituencies; whether defendants participated 
in, conspired in, or aided and abetted the dissemination of false 
statements, which caused foreseeable injury to the class;  whether the 
HURWITZ defendants impeded with the performance by the former directors 
of the old PACIFIC LUMBER COMPANY of their respective fiduciary duties to 
their non-stockholder constituencies; the propriety, fairness and 
legality of the merger and the offer attacked in this action and of the 
elimination of PACIFIC's public non-shareholder constituencies' rights 
thereby; the duties owed by defendants to members of the classes; the 
resulting liabilities of defendants;  the measure of damages;  and the 
proper remedies.

      24.  The claims of the plaintiffs are typical of the claims of all 
members of the respective several classes and sub-classes.

      25.  The plaintiffs are representative parties who will fully and 
adequately protect the interest of the classes.        

      26.  Plaintiffs know of no difficulty which would be encountered in 
the management of this litigation that would preclude its maintenance as 
a class action.

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      27.  The plaintiffs and the classes and sub-classes have sustained 
and will sustain damages as a result of defendants' misconduct as alleged 
herein.

      28.  In absence of this class action, defendants will retain the 
benefits of their immense, outrageous, and (to all fairminded people) 
scandalous wrongdoing.  Plaintiffs became aware of the significant facts 
constituting misconduct and leading to the causes of action sued upon 
herein only after the consummation of the merger, i.e., after February 
26, 1986 and for much of the relevant acts of fraud, only after September 
8, 1988, following the filing by the case of SEC v. Drexel and Milken in 
the Southern District of New York by the Enforcement Branch of the 
Securities and Exchange Commission.  Plaintiffs only became aware of many 
of the other essential facts alleged herein by independent research 
conducted during the period since early 1990 when this action was stayed 
and by discovery produced in the federal PACIFIC LUMBER shareholder 
litigation.

          THE DREXEL - BOESKY - MAXXAM/HURWITZ CONNECTION

      29.  Plaintiffs are informed and believe and thereupon allege the 
following:

	    (a)  From late 1984 through early 1986, defendants MILKEN and BOESKY 
("MILKEN defendants"), devised and carried out a fraudulent scheme to 
circumvent the securities laws and to 

profit  at the  expense of publicly-owned companies and the in-

/////

vesting public, and in this case, at the expense of PACIFIC's 
non-shareholder constituencies.

           (b)  In carrying out that scheme, the MILKEN defendants used  
BOESKY and his  various  organizations as "fronts" or undis- closed 
nominees for MILKEN in a wide variety of securities transactions. 

	    (c)  In early 1984, MILKEN, acting on behalf of himself and other 
MILKEN associates, initiated a secret arrangement with BOESKY (the 
"Arrangement") pursuant to which    certain of the BOESKY-controlled 
entities acquired, held or disposed of various securities at the 
direction of defendant MILKEN for MILKEN's benefit.  MILKEN retained a 
secret beneficial ownership interest in the securities positions that 
MILKEN instructed the BOESKY organization to take.  The Arrangement also 
included instances in which DREXEL purchased, held or disposed of 
securities in which the BOESKY organization retained a secret beneficial 
ownership interest.

           (d)  On September 30, 1985, MAXXAM publicly announced that it 
intended to commence a tender offer for all outstanding shares of common 
stock of the old PACIFIC LUMBER at $36.00 in cash per share, when 
Pacific's stock was trading at $33.00 per share.  The offer was to be 
conditioned upon, among other things, a sufficient number of shares being 
validly tendered and not withdrawn so that the number of shares of 
PACIFIC stock, when added to the 994,900 shares acknowledged by MAXXAM as 
owned by MPI and MCOP, and some of which had been acquired from 
JEFFERIES, would constitute a majority of the then outstanding shares.  
The offer was also conditioned upon the receipt of sufficient financing 
to purchase all outstanding shares.  MAXXAM was assisted by DREXEL as 
dealer-manager and by MILKEN.  On October 2, 1985, MXM CORP. actually 
commenced its tender offer at $38.50 per share.

	    (e)  Between October 19 and October 22, 1985, HURWITZ and 
representatives of MAXXAM, the old PACIFIC LUMBER, SALOMON BROTHERS, and 
MILKEN negotiated the terms of the MXM tender offer.  On October 22, 
1985, MAXXAM and PACIFIC LUMBER agreed to merge.  As part of the 
agreement, MXM (MAXXAM) increased its tender offer price from $38.50 to 
$40.00 cash per share.  This agreement was publicly disclosed on October 
23, 1985.   

              AGENCY AND CONCERTED ACTION ALLEGATIONS

      30.  At all times mentioned herein each of the individual 
defendants was the agent and/or employee of each of the          
remaining defendants and was at all times mentioned herein acting within 
the course and scope of such agency and employment.

      31.  At all times mentioned herein each of the defendants acted in 
concert with the other defendants, pursued a common course of conduct, to 
commit or participate in the commission of the wrongs complained of 
herein.

      32.  At all times mentioned herein the HURWITZ defendants and 
MILKEN,  engaged in substantial activity which impeded the 

/////

PACIFIC officers and directors in performing their fiduciary duties to 
plaintiffs and the class.

      33.  On or about September 30, 1985, and in a supplement dated 
October 11, 1985, the old PACIFIC LUMBER entered into a contract with 
SALOMON BROTHERS INC, by which SALOMON was hired to render certain 
financial advisory and investment banking services in connection with the 
MAXXAM tender offer and other potential business acquisitions or 
combinations, any of which would directly relate to and affect the 
interests of PACIFIC and its non-share- holder constituencies.  For 
reasons which will become obvious, the contract between SALOMON and 
PACIFIC, particularly the October 11, 1985 supplement, shall be referred 
to throughout as the "Disincentive Contract."

      34.  As part of the Disincentive Contract, SALOMON agreed to 
familiarize itself with the business, operations, properties, financial 
conditions, and prospects of PACIFIC.

      35.  The Disincentive Contract between PACIFIC and SALOMON 
provided, inter alia, that:

           (a)  SALOMON was to advise and assist PACIFIC in evaluating 
any proposal relating to an acquisition or similar business combination 
involving PACIFIC, or relating to the acquisition or more than 10% of 
PACIFIC's  voting securities (hereinafter "Combination Transaction");

           (b)  SALOMON was to advise and assist PACIFIC in promoting the 
best interests of PACIFIC and its shareholders if a proposed Combination 
Transaction was determined by the Board not to be in the best interests 
of PACIFIC and its shareholders;

           (c)  SALOMON was to advise and assist PACIFIC in con- sidering 
the desirability of following "Alternative Trans- actions":  an 
acquisition by PACIFIC of another business; a recapitalization or similar 
transaction; a repurchase of out-standing shares; or any similar 
transaction;

           (d)  SALOMON was, if requested by the PACIFIC Board of 
Directors, to render opinions on the adequacy of the consideration to be 
paid, from a financial point of view, for any Combination Transactions 
including the  MAXXAM tender offers; and

           (e)  PACIFIC was to indemnify and hold harmless SALOMON in 
connection with any claims, losses, liabilities or damages arising from 
the engagement.

      36.  The Disincentive Contract further provided that PACIFIC was to 
pay defendant SALOMON  for its services, if PACIFIC was an independent, 
going concern, one year from the date of the supplement to the 
Disincentive Contract, the sum of $2.5 million;  on the other hand, 
SALOMON would receive a cash fee equal to .50% of the Aggregate 
Consideration paid, as defined in the Agreement, involved in any 
consummated Combination Transaction involving any acquisition of more 
than 10% of the COMPANY's outstanding voting securities by any person or 
group at a price in excess of $38.50 per share, whether pursuant to a 
tender offer, private or open market purchases or otherwise, and whether 
or not the consummated Combination Transaction involved MAXXAM.  In other 
words, if PACIFIC agreed to a merger with HURWITZ paying $38.51 per 
share, SALOMON would (and did) receive approximately $4.3 million.  These 
terms of the Disincentive Contract were not disclosed to the shareholders 
prior to the execution of the Merger Agreement.

      37.  At all times relevant hereto SALOMON knew or should have known 
that among the primary, ultimate, and intended beneficiaries of its 
services were the non-shareholder constituencies of PACIFIC.  Likewise, 
defendants MAXXAM, HURWITZ and MILKEN, knew or should have known that, 
among the primary, ultimate, and intended beneficiaries of Article 10 of 
PACIFIC's Articles of Incorporation were the non-shareholder 
constituencies of PACIFIC.

      38.  On October 2, 1985, MAXXAM through MXM, offered $38.50 per 
share in case for PACIFIC common stock, a unilateral increase of $2.50 
per share over the announced offer two days earlier.

      39.  The PACIFIC Restated Articles of Incorporation included a 
number of anti-takeover provisions added by amendment in 1981.  Among 
these amendments was a provision which required that if an entity into 
which PACIFIC planned to merge owned or controlled five percent (5%) or 
more of the outstanding shares of PACIFIC, then such merger could not be 
accomplished unless a supermajority or eighty percent (80%) of the 
outstanding shares of PACIFIC entitled to vote voted for the merger.

/////



      40.  On October 9, 1985, the PACIFIC Board of Directors 

unanimously rejected the MAXXAM tender offer.  In addition, the PACIFIC 
Board of Directors adopted a series of amendments to PACIFIC's Retirement 
Plan including a provision to provide that in the event of an  unapproved  
change in  control, the approximately $60 million dollars in excess in 
the Retirement Plan would immediately vest in the then existing employees 
and retirees.  See "Outline of Amendments to the Retirement Plan", 
attached hereto as Exhibit "B".

      41.  At the October 9, 1985 PACIFIC Board of Director's meeting, 
SALOMON rendered an opinion that the MAXXAM offer of $38.50 per share was 
inadequate from a financial point of view.

      42.  On October 10, 1985, ELAM and HOOVER, with the acquiescence 
and approval of the PACIFIC officers and directors, wrote a letter to 
PACIFIC shareholders which characterized defendant MAXXAM's offer of 
$38.50 per share as "inadequate and not in the best interest of the 
Company and its shareholders" and urged stockholders not to accept the 
offer.  The October 10, 1985, letter stated that PACIFIC's Board had 
considered many factors in reaching its decision including: the opinion 
of SALOMON BROTHERS, INC., PACIFIC's financial advisor; the highly 
conditional nature of the offer and the extremely leveraged financial 
structure it contemplated; MAXXAM's inability to repay the debt incurred 
in order to raise the case to make the offer; and the adverse effects on 
PACIFIC, its employees, the communities it serves and its other 
constituencies, of MAXXAM's intended program to sell off PACIFIC's assets 
and increased harvesting rates in an effort to raise cash to service the 
debt.

      43.  The PACIFIC officers and directors, and DOES 1 through 15, 
authorized the filing of a 53 page complaint on behalf of PACIFIC in the 
United Stated District Court for the Northern District of California, 
Civil No. C857434, against HURWITZ, MXM, and MAXXAM (hereinafter "PACIFIC 
complaint"). 

      44.  The PACIFIC complaint included causes of action against the 
HURWITZ defendants for Federal and State Securities Laws violations and 
violations of the Racketeer Influenced and Corrupt Organizations Act 
("RICO"), sought compensatory and treble damages and injunctive relief in 
connection with the tender offer $38.50 per share.  The PACIFIC complaint 
repeatedly, and at length, charged the HURWITZ  defendants with 
attempting to snatch control of PACIFIC for an inadequate price far below 
its true value, and, failing that, attempting to extract "Greenmail" 
payments by threatening to take control of PACIFIC unless PACIFIC 
repurchases defendants' stock at premium prices.  The PACIFIC complaint 
also detailed what it refers to as the "Hurwitz History of Attempting 
Acquisitions at Inadequate Prices and Extractions of 'Greenmail'."        
45.  Despite the concerns voiced by the PACIFIC officers and directors, 
and the allegations of the PACIFIC complaint, on October 22, 1985, the 
PACIFIC officers and directors, while under the erroneous assumption that 
HURWITZ held less that 5% of PACIFIC LUMBER STOCK and therefore needed 
only 50% ownership to effectuate a merger, decided to accept a merger 
agreement for the acquisition of PACIFIC by defendant MAXXAM.  As part of 
the agreement, MAXXAM offered $40.00 per share, i.e., $l.50 over MAXXAM's 
last offer.  Under the Merger Agreement, each share of Pacific common 
stock not tendered would be converted into the right to receive $40.00 in 
cash in the subsequent merger, thus amounting to a forced sale of all 
PACIFIC  common stock.  Moreover, the PACIFIC officers and directors 
granted to the HURWITZ defendants an option to purchase 6,000,000 shares 
of PACIFIC stock in addition to tendered shares, thus locking in the 
HURWITZ defendants' position.  

      46.  On October 22, 1985, SALOMON rendered an opinion to  PACIFIC 
that  MAXXAM's  tender  offer was  fair and adequate from a financial 
point of view but said little or nothing about its fairness to PACIFIC 
LUMBER's non-shareholder constituencies.

      47.  By agreeing to the merger on October 22, 1985, at a time when 
MAXXAM claimed to own 4.6% of PACIFIC shares, the PACIFIC directors 
believed that they were voiding the protection of the 80% supermajority 
rule provided by PACIFIC's Restated Articles of Incorporation.  The 
PACIFIC directors also knew that if they had not agreed to the merger on 
October 22, 1985, MAXXAM would very shortly have acquired more than 5% of 
PACIFIC's shares and any merger would have required approval by 80% of 
the outstanding shares.

/////

      48.  The PACIFIC directors knew or would have known, but for their 
failure to adequately inform themselves of information relevant to 
MAXXAM's takeover bid, and but for HURWITZ' fraudulent actions impeding 
their ability to respond properly, that MAXXAM could not have obtained 
the 80% approval.

      49.  MAXXAM could not have obtained the financing necessary to 
complete the Merger Agreement if the 80% supermajority rule remained in 
effect and if PACIFIC had not provided MAXXAM with the 6,000,000 share 
lockup.     

      50.  The PACIFIC directors further facilitated the financing of the 
merger by making available to HURWITZ defendants $55 to $60 million of 
the money in PACIFIC's Retirement Plan which  was reserved for pro rata 
distribution to PACIFIC's employees and retirees in the event of an 
unfriendly takeover.  The ostensible approval of the merger by the 
PACIFIC defendants made the $55 to $60 million available to the HURWITZ 
defendants, thereby effectively financing the $1.50 per share increase in 
the MAXXAM 

offer, which increase - with approximately 21,800,000 shares outstanding 
- cost HURWITZ approximately $33 million.

      51.  Because the PACIFIC Board's approval to the merger was induced 
by the fraudulent acts complained of herein and since fraud vitiates 
consent, said approval was a nullity and the pension fund excess of 
approximately $60 million therefore, pursuant to the terms of the old 
PACIFIC LUMBER Retirement Plan, vested immediately in the then-existing 
employees and retirees.  Said then-existing employees and retirees are 
therefore the owners of said $60 million.  Further, said then-existing 
employees and retirees are entitled to both interest on said $60 million 
at the legal rate since October 22, 1985 and to triple damages from 
CHARLES HURWITZ and the new PACIFIC LUMBER because of the actions of the 
defendants complained of herein constituted violation of the Racketeer 
Influenced and Corrupt Organizations Act (RICO), i.e., 18 U.S.C. ¤1961, 
et sequitur.

      52.  In order to induce the PACIFIC Board to agree to the $40.00 
per share offer, MAXXAM made the following concessions to PACIFIC 
management:  

	    (a)  MAXXAM agreed to honor the very same employee "golden 
parachute" agreements it sought to void in the MAXXAM Complaint filed on 
October 18, 1985, in Maine State Court;

	    (b)  MAXXAM agreed not to reduce management salary for a period of 
three years after the consummation of the proposed merger;

    	    (c)  MAXXAM agreed to use its "best efforts" to have director 
GENE ELAM elected to the Executive Committee of the Board of Directors of 
MXM CORP., the entity into which PACIFIC was to be merged pursuant to the 
terms of the Merger Agreement;

     	    (d)  MAXXAM agreed to indemnify and hold harmless the PACIFIC 
Board from any and all liability incurred by the PACIFIC individual 
defendants in connection with or arising out of the merger, thereby 
"sterilizing" their judgment.

      53.  The PACIFIC Board agreed to the following:

           (a)  To dismiss its federal action filed on October 9, 1985;

           (b)  To deactivate the potent anti-takeover provisions of the 
Company Charter, including (most significantly) the eighty percent (80%) 
or supermajority rule;

           (c)  To free up for MAXXAM's use nearly Sixty Million Dollars 
($60,000,000.00) in surplus cash in the Company's Retirement Plan -- 
funds which had theretofore been reserved for pro-rata allocation to the 
Company's employees on October 9, 

1985.  As a result, the increased price from $38.50 to $40.00     was 
totally illusory.  The PACIFIC directors effectively financed this 
increase for HURWITZ with one-half of the $60 million surplus and HURWITZ 
in fact, received as a result of the Merger Agreement, an additional $27 
million fairly described as "HURWITZ's windfall."

           (d)  In addition, the PACIFIC Board made a number of 
additional concessions to HURWITZ that removed from its 

stockholders any realistic possibility that a competitive offer would be 
forthcoming.  Most significantly, The Board agreed to abrogate the 
protection of Section 910 of the Maine Business Corporations Act.  The 
Board provided HURWITZ a stock option of six million additional shares.  
The Board agreed not to solicit additional offers and agreed to pay 
HURWITZ a $21 million cancellation fee if an unsolicited successful offer 
came in.

      54.  The PACIFIC directors, SALOMON BROTHERS, and MAXXAM, 
individually, and in concert, directly and indirectly, were fraudulently 
induced by the HURWITZ defendants to engage and actively participate in a 
plan and scheme as a result of which the directors were induced to breach 
their fiduciary duties of honesty, loyalty, good faith, fidelity, fair 
dealing, due care and trust owed to PACIFIC's non-shareholder 
constituencies in the manner described elsewhere throughout this 
complaint and in at least the following respects:

           (a)  The PACIFIC directors approved the Merger Agree- ment 
without adequately informing themselves of all material information 
reasonably available to them, including inter alia, the current value of 
the timber assets of the Company.  Further, the facts that the PACIFIC 
directors had not conducted a full and adequate timber cruise of its 
timber assets using currently available methods and that no extensive, 
visual cruise had been made since 1956, almost 30 years previous, 
constituted a breach of said duties.

           (b)  Article Tenth of PACIFIC's Article of Incorpor- ation 
directs, among other things:

	The Board of Directors of this corporation, when evaluating any offer of 
any party to (a) make a tender or exchange offer for any equity security 
of this corporation, (b) merge or consolidate this corporation with 
another corporation, or (c) purchase or otherwise acquire all or 
substantially

	all of the properties and assets of this

	corporation, shall, in connection with the

	exercise of its judgment in determining what is in

	in the best interest of this corportion and its

	stockholders, give due consideration to (i) all

	relevant factors, including without limitation the

	the social, legal, environmental and economic

	effects on the employees, customers, suppliers and

	other constituencies of this corporation and its

	subsidiaries, on the communities and geographical

	areas in which this corporation and its subsidiaries

	operate or are located on and on any of the

	businesses and properties of this corporation or any

	of its subsidiaries, as well as its subsidiaries,

	as well as such factors as the directors deem

	relevant, and (ii) not only the consideration being

	offered, in relation to the then current market price

	for the corporation's outstanding shares of capital

	stock but also in relation to the board of directors'

	estimate of the future value of this corporation

	(including the unrealized value of its properties

	and assets) as an independent going concern.

	(Emphasis added)



The PACIFIC directors were induced by the HURWITZ defendants to breach 
their duties to PACIFIC's "other constituencies" by failing to take such 
factors into account in approving the Amended Offer at $40.00 per share.  
The fraud conducted by the HURWITZ defendants impeded the PACIFIC 
directors ability to perform their duties.  In fact, the PACIFIC 
directors in consideration of MAXXAM's first offer of $38.50 per share, 
had expressly concluded that it was not in the best interests of the 
Company's constituencies to permit HURWITZ to (i) increase annual lumber 
production each year to a level which in 1990 would equal twice the 
Company's 1984 production and thereby violate the Company's 45 year 
policy of "continuous yield", whereby the volume of timber standing each 
year would remain constant; and (ii) dismember the Company by selling off 
some or all of the Company's timberlands.  The HURWITZ financed plan has 
resulted in substantially increased lumber production, e.g., from 
approximately 137 million board feet in 1985, to at least 310 million 
board feet in 1987, and the sale of the Company assets to meet principal 
and interest payments to finance HURWITZ' acquisition of Kaiser Aluminum, 
and to further enrich HURWITZ.  The PACIFIC Board's reversal of position 
was without any legitimate basis and constituted a breach of duty by the 
PACIFIC directors.

      55.  The Merger Agreement could not have taken place in the absence 
of the acts of the PACIFIC directors set forth herein, acts wrongfully 
induced by the fraud of HURWITZ and the HURWITZ defendants.

      56.  Using their positions of control and dominance of the business 
and corporate affairs of PACIFIC and their knowledge of private  
corporate  information concerning PACIFIC's assets, busi-

ness, plan and prospects, the PACIFIC officers and directors by acting as 
aforesaid, and impeded by HURWITZ' fraud, pursued a plan and scheme which 
resulted in the transfer of unfettered control and complete ownership of 
PACIFIC and its valuable assets and business operations to HURWITZ and 
assured that all of PACIFIC's non-shareholder constituencies suffered 
loss of significant benefits.  

      57.  The PACIFIC officers and directors (and those acting in 
concert with them) dominated and controlled the business and corporate 
affairs of PACIFIC and were in possession of private corporate 
information concerning PACIFIC's assets, businesses and future prospects.  
There existed an imbalance and disparity of knowledge and economic power 
between the PACIFIC officers and     directors, and SALOMON BROTHERS on 
the one hand, and the non-shareholder constituencies of PACIFIC on the 
other.  In doing the foregoing acts, and impeded by HURWITZ' fraud, the 
PACIFIC officers and directors furthered their own private financial 
interests to the detriment of the interests of the classes, in abuse of 
their positions. 

      58.  The acts complained of herein were wilful, malicious and 
oppressive, in that HURWITZ and the HURWITZ defendants and each of them, 
knew that their actions as complained of herein would result in improper 
practices, violations of duty and other acts completely alien to the 
duties of officers and directors to carry out corporate affairs in a 
fair, just, honest, and equitable manner, were in violation of Article 10 
of the PACIFIC's Restated Articles of Incorporation, and caused PACIFIC's 
directors to breach their duties to the non-shareholder constituency 
Classes. By reason of the foregoing, the class members are entitled to 
exemplary damages.

      59.  As a result of the actions of the HURWITZ defendants, 
plaintiffs and the Classes have been and will continue to be damaged in 
that they have not received and will not receive the benefits to which 
they are entitled as beneficiaries of the contractual relationship 
established by the January 5, 1981 Proxy 

/////1

Statement and the adoption by the Pacific Lumber shareholders of Article 
Tenth described therein.

      60.  By reason of the acts, practices and course of conduct alleged 
herein, and because they were impeded in the performance of their duties 
by HURWITZ' fraud, SALOMON BROTHERS and the PACIFIC directors disregarded 
and did not dutifully and properly consider the detrimental social, 
legal, environmental and economic effects of the HURWITZ defendants' 
takeover on the employees, customers, suppliers, and other constituencies 
of PACIFIC and its subsidiaries, on the communities and geographical 
areas in which PACIFIC and its subsidiaries operate, and on the business 
and properties of PACIFIC.

      61.  In particular, SALOMON BROTHERS and the PACIFIC directors 
acted in disregard of the disastrous environmental and economic 
consequences to the non-shareholders constituencies of the HURWITZ 
defendants' financial and operational plans.  The PACIFIC officers and 
directors apparently believed that the HURWITZ defendants' plan would 
gradually increase PACIFIC'S annual timber harvesting over 5 years to 
double the 1985 levels in order to service the debt which would be 
incurred to complete the takeover.  But HURWITZ immediately more than 
doubled said harvest in 1986, without any gradual increase and has 
probably tripled said harvest.  This has meant a radical alteration of 
the continuous sustained-yield cutting practices traditionally employed 
by PACIFIC, and has irreparably injured the environmental quality of 
Humboldt County's unique redwood timber-lands.  HURWITZ' rate of 
harvesting, would, if left to run its course, and if not earlier limited 
by enforcement of strengthened environmental regulation caused by 
HURWITZ' destructive timber harvesting practices, within less than 17 
years from the date of the takeover and probably sooner, eliminate the 
need for the old growth redwood Mill B and factory in the town of Scotia, 
California, thereby eliminating 80% of the 1985 employment base of 
PACIFIC LUMBER, i.e., the jobs of roughly 720 people.  

	Because of the harvesting practices and rate of cut of old growth 
redwood timber undertaken by MAXXAM and HURWITZ on PACIFIC LUMBER 
timberland, there is great likelihood that further reduc- tion in the 
years of employment in the production, harvesting, and milling of old 
growth redwood will occur due to intensified environmental regulation and 
enforcement brought about because of HURWITZ' departure from pre-takeover 
harvesting rates and methods.  Said change of rate and method, including 
the instituting of clear cutting of timberland has caused a public uproar 
and has brought the national, state, and local spotlight on the 
harvesting of old growth, with the increased likelihood that the bedrock 
resource provider of jobs for the Pacific Lumber non-shareholder 
constituencies, namely old growth redwood, will, within a short period of 
time, not be available for harvesting at all.  This could occur perhaps 
in as few as three years, perhaps even less;  whereas, under the prior 
pre-takeover management philosophy, the volumes of old growth redwood, 
both residual and virgin, were sufficient to provide approximately 60 
years of employment for 720 people, at the publicly stated planned (by 
old PACIFIC LUMBER management's public filings) harvest rate of 40 to 50 
million board feet of upper grade redwood per year.  The personal and 
economic consequences to the class members, their families, spouses and 
children, will be devastating.  Consequences such as these were intended 
to be avoided by the adoption, in January, 1981, of Article 10 of PACIFIC 
LUMBER's Articles of Incorporation, attached hereto as Exhibit "A", as 
part of the January 5, 1981 Proxy Statement, and would have been avoided, 
but for the actions of defendants named herein.

         THE PACIFIC LUMBER FRAUD-BASED TAKEOVER SCHEME 

               CARRIED OUT BY HURWITZ AND MILKEN       



 

      62.  At least by August of 1985, HURWITZ/MAXXAM and MILKEN entered 
into an arrangement, understanding and agreement to act as a partnership, 
joint venture, association and/or group for the common purpose of 
acquiring, holding and disposing of the beneficial ownership of at least 
5%  of PACIFIC LUMBER stock.  At least as of August of 1985, the group 
entered into an arrangement, understanding and agreement for the common 
purpose of acquiring PACIFIC LUMBER.   

      63.  In the spring of 1985, MILKEN and the HURWITZ defendants 
devised a fraudulent and deceptive scheme to conceal their intention to 
acquire PACIFIC LUMBER in a hostile tender offer as more fully set forth 
in the following paragraphs (the "takeover scheme").

      64.  The fruits of this scheme were to be divided consist-ent with 
MILKEN's past business practices:  contingent upon the success of the 
takeover, MAXXAM (or one of its subsidiaries) was to receive a majority 
interest in PACIFIC LUMBER, while DREXEL was to receive warrants for 
stock in MAXXAM and huge fees totaling many millions of dollars in which 
MILKEN would participate.

      65.  There were two primary obstacles to the takeover scheme of 
MILKEN and MAXXAM.  The first of these was the Hart-Scott-Rodino Act 
Pre-Merger Notification Requirements ("H-S-R"), which 

required MAXXAM to notify PACIFIC LUMBER of its takeover merger 
intentions immediately after it had acquired $15 million worth of stock.  
Notification of PACIFIC LUMBER at such an early stage in the takeover 
process however, would have permitted PACIFIC LUMBER to utilize more 
effectively a variety of takeover defenses available to it as well as 
make it more likely that a competing suitor for PACIFIC LUMBER would 
emerge and drive up the price of PACIFIC LUMBER stock.

      66.  To avoid this result, after MAXXAM had obtained shares in 
PACIFIC LUMBER valued at $14.5 million dollars by early August, 1985, 
HURWITZ and MILKEN fraudulently sought to evade H-S-R by having JEFFERIES 
& COMPANY ("JEFFERIES"), a stock brokerage concern, buy additional stock 
on their behalf in secret.

/////

      67.  Pursuant to such an agreement, JEFFERIES began buying PACIFIC 
LUMBER stock on August 6, 1985, and stopped its purchases on September 
27, 1985, when it accumulated over $14 million dollars of PACIFIC LUMBER 
stock.  Although these purchases gave the HURWITZ defendants effective 
control of over $28 million dollars of PACIFIC LUMBER stock, thus 
exceeding the $15 million dollar Hart-Scott-Rodino notification 
requirements,  the HURWITZ defendants intentionally failed to make the 
required notification filing under this Act in a timely manner, thereby 
fraudulently concealing the true nature, extent and amount of HURWITZ' 
holdings of PACIFIC LUMBER stock.  Then, on September 27, 1985, 
consistent with JEFFERIES' agreement secretly to purchase PACIFIC LUMBER 
stock for HURWITZ and DREXEL, JEFFERIES sold this PACIFIC LUMBER stock to 
HURWITZ' company, MCOP, for a price of $29.10 per share, or about $4.00 
per share (about $2 million) below the then market price of $33.

      68.  On September 30, 1985, without having complied with the 
suspension of purchase, notification, and clearance requirements of the 
Hart-Scott-Rodino Act, MAXXAM publicly announced its intention to 
commence a hostile tender offer through the subsi- diary MXM for all 
outstanding shares of common stock of PACIFIC LUMBER at $36.00 cash per 
share (the "tender offer" or "offer").  The tender offer was made on 
behalf of MAXXAM and DREXEL. The offer was conditioned upon a sufficient 
number of shares being validly tendered and not withdrawn so that the 
number of shares of PACIFIC LUMBER stock, when added to the 999,900 
shares benefici- ally owned by MAXXAM and MCOP would constitute a 
majority of the then outstanding shares.  The offer was also conditioned 
upon the receipt of sufficient financing to purchase all shares.  The 
offer could not have been made without DREXEL's full participation, 
including its agreement to finance the transaction.

      69.  On October 2, 1985, MAXXAM raised its tender offer to $38.50 
per share in cash for PACIFIC LUMBER common stock.  Subsequently, this 
offer was raised to $40.00 per share.  At no time during the entire 
tender offer process did HURWITZ or DREXEL reveal that they had wilfully 
violated H-S-R in order to minimize PACIFIC LUMBER's defenses or to 
preclude a second suitor from emerging.

      70.  The second obstacle to the takeover scheme was the Sixth 
Article of PACIFIC LUMBER's Articles of Incorporation ("Article 6").  
Article 6 required that a proposed merger with any person, entity or 
corporation owning or controlling, either directly or with an affiliate 
or associate, 5%  or more of PACIFIC LUMBER's stock, be approved by the 
affirmative vote of at least 80% of the outstanding shares unless PACIFIC 
LUMBER's Board of Directors approved the merger before the person 
acquired a 5% interest.  Article 6 made it impossible for a hostile 
tenderer such as HURWITZ or DREXEL to acquire a substantial stake in the 
company at a low pre-tender price without running the risk that more than 
20% of the shareholders would reject the tender offer.

      71.  Article 6's cap of 5% on the amount of shares a hostile 
acquirer could purchase without triggering the 80% rule caused another 
practical problem for HURWITZ and DREXEL.  The smaller the number of 
shares there were in the hands of persons who would readily sell to 
HURWITZ and DREXEL, the less likely the takeover would succeed either 
because the Board of Directors would be able to rally sufficient support 
against the takeover or because another acquirer could easily enter the 
bidding contest.

      72.  In the days surrounding HURWITZ' takeover announcement DREXEL, 
through MILKEN, secretly began to purchase large blocks of PACIFIC 
LUMBER's shares through its agent, BOESKY.  The purposes of DREXEL's 
purchases, and the reasons they were kept secret, were twofold.  First, 
DREXEL sought to enhance its and MAXXAM's control over a large block of 
shares in the takeover contest while at the same time keeping its 
holdings from becoming public knowledge to avoid the application of 
Article 6.  Second,  MAXXAM, HURWITZ, MILKEN, and DREXEL knew that by 
having control of such a substantial block of shares, it could influence 
the market price of the stock during the takeover contest, thereby 
intimidating the PACIFIC Board of Directors and scaring away any 
competitive bidder.

      73.  Pursuant to this plan, beginning on or about October 1, 1985, 
DREXEL, through MILKEN, caused its agent, BOESKY, to pur-chase 51,000 
shares of PACIFIC LUMBER.  The BOESKY organization 

/////

ultimately purchased more than 5% of PACIFIC LUMBER stock on behalf of 
DREXEL prior to October 21, 1985.

      74.  As a result of the foregoing purchases of PACIFIC LUMBER 
stock, HURWITZ, MILKEN, DREXEL and the MAXXAM defendants, acting as 
members of a partnership, joint venture, association and/or group for the 
purpose of acquiring, holding and disposing of PACIFIC LUMBER securities, 
by at least October 20, 1985, had direct and/or beneficial ownership of 
in excess of 5% of the stock of PACIFIC LUMBER, prior to Board approval 
of any merger, triggering the Article 6 supermajority provision.

      75.  To hide the fact that Article 6 had been triggered, and to 
avoid disclosing their violations of federal and state law, MILKEN and/or 
HURWITZ, and MAXXAM with DREXEL's knowledge, caused the following things 
to be done:

           (a)  In furtherance of the takeover scheme, BOESKY, with 
MILKEN's knowledge and substantial assistance, filed a Schedule 13D with 
the Securities and Exchange Commission on  November 1, 1985, falsely 
stating that BOESKY was the beneficial owner of PACIFIC LUMBER stock 
instead of DREXEL.

           (b)  Although DREXEL through BOESKY became the beneficial 
owners of in excess of 5% of PACIFIC LUMBER stock by at least October 22, 
1985, they never filed a mandatory Section 13(d) disclosure statement, 15 
U.S.C. Section 78m(d).  

           (c)  Although DREXEL became a bidder for PACIFIC LUMBER 
securities by at least October 22, 1985, it never filed a mandatory 
Section 14(d) disclosure statement, 15 U.S.C. Section 78n(d).

           (d)  On October 2, 1985, HURWITZ and MAXXAM, with MILKEN's 
knowledge and substantial assistance, filed its Schedule 14D-1 which 
contained misstatements of material facts and omitted to state material 
facts required to be stated therein and necessary to make the statements 
not misleading, including, but not limited to:

                (1)  HURWITZ' and MAXXAM's failure to disclose

          that it intentionally violated the Hart-Scott-Rodino

          order to reduce the time frame in which PACIFIC

          LUMBER could respond to its unfriendly tender offer;

                (2)  HURWITZ' and MAXXAM's failure to disclose 

          the role of DREXEL in the takeover scheme, including:

                 a.  DREXEL's status as a bidder;

                 b.  DREXEL's financial strategy for the offer;  

          and

                 c.  The substantial impact and control which

          DREXEL had on the terms of the offer and would have

          on the future of the surviving corporation.

                 d.  The amount of stock being held by DREXEL

          and BOESKY for HURWITZ' benefit and advantage.

           (e)  On November 1, 1985, and at MAXXAM's request, DREXEL 
caused one of its agents and officers, DANIEL P. LYNCH, to file an 
affidavit in Federal Court in the Northern District of California stating 
that DREXEL did not directly or beneficially own any PACIFIC LUMBER 
shares.  That affidavit was false.  At the time it was filed, DREXEL and 
MILKEN's agent BOESKY owned more than 5% of all outstanding PACIFIC 
LUMBER shares for DREXEL and MILKEN's benefit.  

	    (f)  HURWITZ and MAXXAM failed to disclose in any tender offer 
materials that Article 6's 80% vote requirement had been triggered by 
MAXXAM's and DREXEL's purchases of PACIFIC LUMBER stock.

      77.  The facts contained in paragraph 57 were not otherwise 
disclosed to PACIFIC LUMBER shareholders during the tender offer.

      78.  Had HURWITZ, MAXXAM, MILKEN, and DREXEL disclosed that they 
were required to obtain 80% of PACIFIC LUMBER's stock to effectuate the 
merger as Article 6 commands, the merger could not have succeeded.  That 
is because, inter alia, large blocks of stock were in the possession of 
certain individual shareholders who were opposed to the merger and who 
could have and would have influenced a sufficient number of shareholders 
to prevent the merger.

      79.  The failure of the merger would have permitted the 
shareholders to retain their stock until the true worth of PACIFIC 
LUMBER's shares was offered.  The true worth of PACIFIC LUMBER's shares 
was in excess of $120 per share.

/////

/////



     80.  As a proximate result of said wrongful acts hereinbefore 
alleged, PACIFIC's non-shareholder constituencies have been injured as 
set forth herein.

      81.  The acts complained of hereinabove were wilful, malicious, and 
oppressive, and were done in conscious disregard of the rights and 
entitlements of PACIFIC's non-shareholder constitu-

encies.  By the reason of the foregoing, the classes are entitled to 
exemplary damages.

      82.  Defendants MAXXAM, HURWITZ and MILKEN, knew of the economic 
relationship between PACIFIC and the plaintiff non-shareholder 
constituencies and the prospective economic benefits of the relationship.  
Absent the wrongful acts of HURWITZ, the other defendants, and each of 
them, and MILKEN, that economic advantage could have been maintained and 
enjoyed for many decades.        83.  Defendants, MAXXAM, HURWITZ and 
MILKEN, committed the acts alleged herein with the intention of 
disrupting the relationship with its accompanying prospective economic 
benefits to the PACIFIC non-shareholder constituencies, or negligently 
did so with the same effect. 

      84.  The tender offer and Merger Agreement seriously damaged  the 
economic relationship between PACIFIC and its non-shareholder 
constituencies.

      85.  Article Tenth of the Articles of Incorporation of the PACIFIC 
LUMBER COMPANY, set forth hereinabove, along with the 

January 5, 1981 Proxy Statement and letter to shareholders recommending 
the adoption of the Revised Restated Articles of Incorporation of PACIFIC 
LUMBER, incorporated herein as Exhibit"A", created a contractual 
relationship between the old PACIFIC LUMBER and the non-shareholder 
constituencies and a reasonable expectation of prospective economic 
advantage for the named Classes, created for the benefit of the Classes 
and sub-Classes described herein. 

      86.  Because of the acts complained of in this Complaint, the 
contractual relationship has been interfered with and breached by the 
defendants PACIFIC directors, SALOMON BROTHERS, MAXXAM, HURWITZ and 
MILKEN, all to the damage of plaintiffs and classes in a dollar amount 
according to proof at trial.

      87.  The acts complained of as intentional hereinabove were wilful, 
malicious and oppressive, and were in conscious disregard of the rights 
and entitlements of PACIFIC's non-shareholder constituencies.  By the 
reasons of the foregoing, the classes are entitled to exemplary damages 
for said intentional acts.

      88.  Certain of the acts complained of herein, constituting the 
respective elements of the respective causes of action, were of a 
continuing nature, necessary to, and culminating in, the consummation of 
the merger of THE PACIFIC LUMBER COMPANY into HURWITZ' designated entity, 
on February 25, 1986, with consequences as described herein.  Certain 
other acts complained of herein continue to the present.

/////

      89.  All of the allegations made in this Complaint are based on 
information and belief, except those allegations which pertain to the 
plaintiffs, which are based on personal knowledge.  Plaintiffs' 
information and belief is based, inter alia, on  investigations made by 
and through their attorney, as well as on discovery material obtained in 
the shareholder litigation, now settled.

                       ADDITIONAL  ALLEGATIONS

	90.  The HURWITZ defendants and SALOMON failed to disclose to PACIFIC 
LUMBER shareholders prior the October 22, 1985 merger agreement being 
entered into, that SALOMON had an ongoing and continuing business 
relationship with CHARLES HURWITZ and his vast financial empire.  As 
early as 1983, SALOMON had established a business relationship with 
UNITED FINANCIAL GROUP ("UFG"), an entity that HURWITZ controlled.  
During 1983 UFG engaged SALOMON BROS. to assist UFG's wholly owned 
subsidiary, UNITED SAVINGS ASSOCIATION OF TEXAS ("USAT") in selling up to 
half of its branches.  Subsequently, in 1984 USAT sold a portion of its 
branch  network with  $647  million  on  deposit  and  issued $647 
million in mortgage-backed notes to the purchaser.  UFG's 1985 Form 10-K 
disclosed that SALOMON was "counter party" for $213 million in USAT's 
mortgage backed security during 1985.  Also, in a prospectus filed with 
the Securities and Exchange Commission ("SEC") on June 28, 1985, it is 
revealed that SALOMON  was retained as lead underwriter in the $75 
million offering of Dutch options rate transferable securities (Darts) by 
USAT FINANCE, III., a wholly owned subsidiary of one of HURWITZ' savings 
and loan related entities.  Ironically, in November 1985, before PACIFIC 
had even filed its Proxy Statement, a Form S-3 filed with the SEC 
disclosed that SALOMON was named lead underwriter in a $1 billion 
offering of collateralized mortgage obligations by another USAT 
subsidiary USAT MORTGAGE.  Further, starting in September 1985, and 
continuing throughout the relevant period and beyond, SALOMON was 
involved closely with another HURWITZ affiliate, namely, TRANSCONTINENTAL 
SERVICE GROUP, N.B. ("TSG"), a publicly held NETHERLANDS ANTILLES CORP.  
At that time, TSG's President and Chief Executive Officer was STANLEY 
COHEN, who was also associated with KRAMER, LEVIN, NESSEN, KAMIN & 
FRANKEL ("KRAMER LEVIN"), a law firm that represents both MAXXAM and TSG.  
During September 1985, COHEN and TSG were approached by the management of 
REVCO, D.S., INC. as a possible equity participant in a contemplated 
leveraged buy out ("LB0") of REVCO, a chain of drug stores.  REVCO 
simultaneously contacted SALOMON to aid in financing the deal.  TSG, 
SALOMON, and a small REVCO management group formed ANAC HOLDING COMPANY 
as a corporate entity to complete the LBO.  Beginning in October 1985, at 
the same time that SALOMON was "assisting" PACIFIC LUMBER as its 
investment 

advisor, SALOMON was also participating in several meetings with the LBO 
group to work out the financing for the pending LBO.  Eventually, TSG 
invested $40 million and SALOMON helped complete the LBO by placing over 
$650 million in securities issued by ANAC.  In that transaction, SALOMON 
earned over $30 million in fees and an 8.3 equity interest in ANAC along 
with TSG.  None of this information showing actual or potential conflicts 
of interest was disclosed to the PACIFIC LUMBER shareholders during the 
tender offer period nor, for that matter, prior to the merger vote in 
February 1986.

      91.  SALOMON and the former PACIFIC LUMBER Board of Directors had 
failed to disclose during the tender offer period (from October 2, 1985 
to November 29, 1985) that SALOMON had estimated the value of the stock 
of PACIFIC LUMBER at between $60 and $77 per share prior to October 22, 
1985.  Said information was not disclosed until late January 1986, after 
the conclusion of the tender offer in which HURWITZ had acquired over 63% 
of the shares of PACIFIC LUMBER COMPANY.  Following the completion of the 
merger in 1986, MAXXAM and HURWITZ authorized a timber cruise on the 
PACIFIC LUMBER timberlands.  The results of said cruise, though 
considered conservative by plaintiffs, was reported publicly by MAXXAM 
and HURWITZ to have shown 47% more old growth redwood timber volume on 
PACIFIC LUMBER's timberland than the old Board of Directors and SALOMON 
BROS. had believed.  MAXXAM also requested that DREXEL file the affidavit 
on November 1, 1985, stating that DREXEL, MAXXAM'S dealer-manager had no 
shares of PACIFIC LUMBER on October 22, 1985.  In fact, DREXEL BURNHAM 
LAMBERT held over 5% of PACIFIC LUMBER shares at the time the merger 
agreement was signed on October 22, 1985.  MAXXAM, HURWITZ, and DREXEL 
failed to disclose to the shareholders that a 80% vote of the 
shareholders to approve the merger was therefore required.  The 
relationship that SALOMON maintained with the HURWITZ entities described 
here-inabove constituted a conflict of interest with PACIFIC LUMBER, the 
PACIFIC LUMBER Board, the PACIFIC LUMBER shareholders, and the PACIFIC 
LUMBER non-shareholder constituencies.  The HURWITZ defendants failure to 
disclose this conflict of interest was a proximate cause of said damage 
to the non-shareholder constituencies of PACIFIC LUMBER.

      92.  Plaintiffs are informed and believe that the value of timber 
located on the PACIFIC LUMBER timberlands exceeded $2.7 billion and that 
the value of all of the assets of PACIFIC LUMBER exceeded $3 billion.  
Plaintiffs are further informed and believe that HURWITZ paid a total of 
$870 million plus approximately $40 million in expenses for the 
acquisition of PACIFIC LUMBER COMPANY in 1985 and 1986.  Thus, a $3 
billion company was acquired for less than $1 billion, largely due to the 
fraud alleged herein committed by the HURWITZ defendants, and each of 
them, by MILKEN, DREXEL, and BOESKY, by the deceipt and fraud worked upon 
the PACIFIC LUMBER Board of Directors, and by the breach of fiduciary 
duties by the various defendants.

      93.  On October 9, 1985, the old PACIFIC LUMBER COMPANY Board of 
Directors amended the PACIFIC LUMBER COMPANY Retirement Plan to provide 
that in the event of an "unapproved" change of control of PACIFIC LUMBER 
COMPANY, all Retirement Plan assets in excess of accrued benefit 
liabilities would vest in the existing employees and retirees and that 
benefits payable to active employees and retired participants would be 
increased to allocate each of them his or her pro-rata share of all said 
surplus Retirement Plan assets.  "Unapproved Change in Control" was 
defined as a change in control "which has not been approved by a majority 
of the Board of Directors (as constituted before the change)".  HURWITZ 
and the HURWITZ defendants gained control of the PACIFIC LUMBER COMPANY 
with the "ostensible" consent of the PACIFIC LUMBER COMPANY Board of 
Directors.  However, said consent was given only because of the fraud 
conducted by the HURWITZ defendants with the assistance of MILKEN, DREXEL 
and BOESKY.  Since fraud vitiates consent in California, under the law, 
the consent of the Board of Directors was not given.  Therefore, the 
approximately $60 million excess in the PACIFIC LUMBER Retirement Plan, 
by law, vested and still vests, in the then existing employees and 
retirees as of on or about October 22, 1985.  And the plaintiff Class of 
the then-existing employees and retirees are entitled to interest thereon 
and to triple damages.

	The acquisition and use of the approximately $60 million excess in the 
PACIFIC LUMBER Retirement Plan by HURWITZ and the HURWITZ defendants was 
wrongfully done and should be returned with interest thereon to the 
appropriate plaintiff class herein.

/////

    94.  The actions complained of herein relating to the economic 
damages resulting from damage to the environment constituted and 
constitute a violation of the public trust and principles of public trust 
law. 

	WHEREFORE, Plaintiffs pray for judgment as hereinafter set forth.

                      FIRST CAUSE OF ACTION

                      (Conversion by Fraud)               





     95.  Plaintiffs hereby incorporate by reference and reallege all the 
allegations contained in paragraphs 1 through 94, inclusive.

     96.  As herein alleged, HURWITZ and HURWITZ defendants wrongfully 
obtained access to and possession of the approximately $60 million in the 
PACIFIC LUMBER Retirement Plan assets in excess of accrued liabilities 
through fraud conducted upon the former PACIFIC LUMBER Board of Directors 
and upon the PACIFIC LUMBER shareholders as described herein.  Said 
wrongful acts were intentional and constituted conversion by fraud from 
the then existing employees and retirees.  Plaintiff Class of the 
then-existing employees and retirees, as of October 22, 1985, are 
entitled to said $60 million, plus interest thereon from said date, and 
because of the intentional and fraudulent nature of the acts of the 
defendant wrong-doers, are entitled to punitive damages.

/////

	WHEREFORE, Plaintiffs pray for judgment as hereinafter set forth.

                      SECOND CAUSE OF ACTION

                             RICO





     97.  Plaintiffs hereby incorporate by reference and reallege all 
allegations contained in paragraphs 1 through 96, inclusive.

     98.  HURWITZ and the HURWITZ defendants, including the new PACIFIC 
LUMBER, along with convicted felons MILKEN, DREXEL BURNHAM LAMBERT, and 
IVAN BOESKY, engaged in this related securities manipulations as part of 
the continuing plan, scheme, and unlawful conspiracy throughout the 
period of time from September 30, 1985 to February 25, 1986, including, 
but not limited to, employing devices, scheme, and artifices to defraud 
and to making materially misleading statements and/or omissions contained 
in the tender offer of October 2, 1985, the amended offer, and the 
solicitation offer of January 1986.  This continuing scheme to defraud 
PACIFIC LUMBER shareholders, with resulting injury to the non-shareholder 
constituencies of PACIFIC LUMBER, constituted and was a part of a pattern 
of racketeering activity that was comprised of, inter alia, numerous 
instances of acts indictable under 18 U.S.C. ¤ 1314 (mail fraud) and 18 
U.S.C. ¤ 1343 (wire fraud); and offenses involving fraud in the sale of 
PACIFIC LUMBER securities as alleged herein.

     99.  The predicate acts alleged herein are "racketeering activity" 
within the meaning of 18 U.S.C. ¤¤ 1961(1)(B) and (D).  These 
racketeering acts constitute a "pattern of racketeering activity" within 
the meaning of 18 U.S.C. ¤ 1961(5) because they were carried out within a 
10 year period and were related and continuous.   They were related in 
that each of these acts had common goals, a similarity of methods, and 
the same or similarity of results, participants or victims.  The 
transactions conducted pursuant to the racketeering conspiracy continued 
indefinitely over an extended period of time with no obvious terminating 
goal or date.  The predicate acts, therefore, were related and 
continuous, not isolated or sporadic.

    100.  At all times relevant to the events alleged herein, PACIFIC, as 
herein defined, constituted an enterprise, as that term is defined in 18 
U.S.C. ¤ 1961(4).  PACIFIC engaged in, and its activities had an effect 
on, interstate commerce.

     101.  At all times relevant to the events alleged herein, HURWITZ 
and the HURWITZ defendants, including MXM CORP., the new PACIFIC LUMBER, 
and MAXXAM, as herein described, constituted an enterprise, as that term 
is defined in 18 U.S.C. ¤ 1961(4).  HURWITZ engaged in, and his 
activities had an effect on, interstate commerce.

     102.  Through commission of these predicate acts constituting a 
pattern of racketeering activity, the HURWITZ and the HURWITZ defendants 
in violation of 18 U.S.C. ¤ 1962(b), acquired and/or maintained an 
interest in or control of PACIFIC, and/or in violation of 18 U.S.C. ¤ 
1962(d), conspired with each other to engage in the foregoing activities 
which are prohibited under 18 U.S.C. ¤ 1962.

     103.  Through commission of these predicate acts constituting a 
pattern of racketeering activity, HURWITZ and the HURWITZ defendants in 
violation of 18 U.S.C. ¤ 1962(c), conducted or participated in the 
conduct of the affairs in the HURWITZ enterprises and/or at MAXXAM, 
and/or in violation of 18 U.S.C. ¤ 1962(d), conspired with each other to 
engage in the  foregoing activities which are prohibited under 18 U.S.C. 
¤ 1962.

     104.  As a direct and proximate result of the foregoing violations 
of 18 U.S.C. ¤¤ 1962(c) and (d), plaintiffs and the members of the 
non-shareholder constituency classes have been injured in their 
businesses, properties and persons and are entitled to triple damages.

	WHEREFORE, plaintiffs pray for judgment as hereinafter set forth.

                    THIRD CAUSE OF ACTION

    (Wrongful Interference With Prospective Economic Advantage

          as to the Pension Fund Excess Taken by Hurwitz)

                                     



     105.  Plaintiffs hereby incorporate by reference and reallege all 
allegations contained in paragraphs 1 through 104, inclusive.

     106.  As a result of the amendment to the PACIFIC LUMBER Retirement 
Plan, the then existing employees and retirees had a right to the $60 
million excess in said Plan assets in excess of  Plan liabilities in the 
event of certain contingencies.  Said contingencies occurred, namely, an 
unapproved change in control of the ownership of the old PACIFIC LUMBER 
occurred since under California law the consent given by the old PACIFIC 
Board of Directors was vitiated by the fraud of HURWITZ.  HURWITZ and his 
fellow defendants, including MXM CORP. and the new PACIFIC LUMBER COMPANY 
attempted to conceal the fraud.  Said funds were, however, taken by 
HURWITZ and the HURWITZ defendants and the plaintiffs classes of 
employees and retirees has been wronged and suffered thereby.  Plaintiffs 
and the classes continue to suffer thereby and seek recovery of said 
funds with interest.

                     FOURTH CAUSE OF ACTION

       (Interference with Prospective Economic Advantage)





     107.  Plaintiffs hereby incorporate by reference and reallege all 
the allegations contained in paragraphs 1 through 106, inclusive.

     108.  The third party beneficiary relationship of PACIFIC'S 
non-shareholder constituency classes constituted an economic relationship 
containing the probability of future economic benefit, including many 
decades of employment, to said classes if not damaged.  The defendants, 
including the HURWITZ defendants, knew of said fact.  Said relationship 
was disrupted by defendants' negligent acts, and plaintiffs and the 
classes described herein suffered, continue to suffer, and will continue 
to suffer, actual damage proximately caused thereby as described herein.

	WHEREFORE, plaintiffs pray for judgment as hereinafter set forth. 



 

                     FIFTH CAUSE OF ACTION

          (Breach of Third Party Beneficiary Agreement)



     109.  Plaintiffs hereby incorporate by reference and reallege all 
allegations contained in paragraphs l through 108, inclusive.

     110.  The actions of the HURWITZ defendants in impeding the old 
PACIFIC LUMBER directors and SALOMON BROTHERS in the performance of their 
fiduciary duties as described, constituted an intentional interference 
with the third party beneficiary contractual agreement created under 
Article 10 of PACIFIC's Restated Articles and under the 1981 Proxy 
Statement of PACIFIC urging shareholder approval of said Article 10.  
Plaintiffs and the classes suffered damages thereby in the loss of 
employment years and the emotional injury suffered by the employees and 
other classes herein described and by the economic harm resulting from 
the environmental damage caused by the HURWITZ defendants to the 
"geographical" areas in which PACIFIC LUMBER COMPANY had its operations, 
and to the communities therein.

	WHEREFORE, plaintiff prays judgment as hereinafter set forth.

                      SIXTH CAUSE OF ACTION

                 (Intentional Interference with 

                 Prospective Economic Advantage)



     111.  Plaintiffs hereby incorporate by reference and reallege all 
the allegations contained in paragraphs 1 through 110, inclusive.

     112.  The third party beneficiary relationship of PACIFIC's 
non-shareholder constituency classes constituted an economic relationship 
containing the probability of future economic        benefit to said 
Classes if not damaged.  The defendants, including CHARLES HURWITZ, knew 
of said fact.  Said relationship was disrupted by said defendants' 
intentional acts, and plaintiffs and the classes described herein 
suffered and continue to suffer actual damage proximately caused thereby 
as described herein.  Defendants' acts were intentional.

	WHEREFORE, plaintiffs pray for judgment as follows:

	1.  For an order declaring this action to be a proper class action;

	2.  For the imposition of a constructive trust on the approximately $60 
million excess in the PACIFIC LUMBER Retirement Fund, and upon such 
assets as are traceable therefrom, plus interest;

	3.  For compensatory damages, according to proof;

	4.  Trebling of damages for violation of the RICO statutes;

	5.  For punitive damages;

	6.  For costs and disbursements of the action including experts fees;

	7.  For reasonable attorneys' fees under the common fund or substantial 
benefit theories or pursuant to Code of Civil Procedure Section 1021.5.

	8.  For such other relief as may be deemed just and proper.

Dated:  April 28, 1997

                                ____________________________

                                WILLIAM G. BERTAIN                          




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