8-K

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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 8-K


                CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934




       Date of Report (date of earliest event reported): November 19, 1999




                           MAXXAM GROUP HOLDINGS INC.
             (Exact name of Registrant as Specified in its Charter)



                                    DELAWARE
                 (State or other jurisdiction of incorporation)




                                    333-18723
                            (Commission File Number)



                                   76-0518669
                     (I.R.S. Employer Identification Number)




                           5847 SAN FELIPE, SUITE 2600
                                 HOUSTON, TEXAS
                    (Address of Principal Executive Offices)
                                      77057
                                   (Zip Code)


       Registrant's telephone number, including area code: (713) 975-7600


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ITEM 5.  OTHER EVENTS

      The Registrant (the "Company") is the indirect parent of The Pacific
Lumber Company ("Pacific Lumber"). On March 1, 1999, Pacific Lumber, Salmon
Creek Corporation, a wholly owned subsidiary of Pacific Lumber ("Salmon Creek"),
and Scotia Pacific Company LLC, another wholly owned subsidiary of Pacific
Lumber ("Scotia LLC"), consummated the Headwaters Agreement with the United
States. Pursuant to the Headwaters Agreement, Salmon Creek received $299.9
million in cash, $15 million of which was utilized to defray expenses in
connection with negotiation and consummation of the Headwaters Agreement and the
balance of which was placed into escrow (the "Escrowed Funds") to be used to
support the timber collateralized notes of Scotia LLC (the "Timber Notes").

      Attached hereto as Exhibit 99.1 is a press release announcing that the
Escrowed Funds have been released and that $169 million has been placed in a
reserve account to support payments on the Timber Notes. Attached hereto as
Exhibit 99.2 is a letter to holders of Timber Notes setting forth additional
information regarding this reserve account, which is known as the Scheduled
Amortization Reserve Account.

                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.





Date:  November 19, 1999
                                            MAXXAM GROUP HOLDINGS INC.
                                                   (Registrant)


                                    By:       /s/ Paul N. Schwartz
                                                 Paul N. Schwartz
                                    Vice President and Chief Financial Officer

EX-99.1

CONTACTS:
Investors: Ron Kurtz
713-267-3686
Media: John Campbell
707-764-2222


                      HEADWATERS FUNDS RELEASED FROM ESCROW



SCOTIA, California (November 19, 1999) -- The Pacific Lumber Company has
announced that the money it received from the government for the Headwaters
Forest has been released from escrow.

On March 1, 1999, when the Headwaters Agreement was signed, $285 million was
placed into an escrow account, which now totals $292.9 million. More than half
of that amount ($169 million) has been placed in a Scheduled Amortization
Reserve Account to support future principal payments on the Timber
Collateralized Notes of Scotia Pacific Company LLC, a wholly-owned subsidiary of
Pacific Lumber.

The Company believes that the decision to release the money from escrow and
establish a Scheduled Amortization Reserve Account is consistent with the goals
of the Headwaters Agreement, one of which was to provide for enhanced
predictability and security for The Pacific Lumber Company and its 1,300
employees.

(Note: An open letter to Scotia Pacific noteholders containing more detailed
information about the Scheduled Amortization Reserve Account follows this
announcement).


                                       ###

EX-99.2

November 19, 1999



            AN OPEN LETTER TO SCOTIA PACIFIC COMPANY LLC NOTEHOLDERS


The Pacific Lumber Company announced today that the Board of Managers of Scotia
Pacific Company LLC (Scotia Pacific) and the Boards of Directors of The Pacific
Lumber Company (Pacific Lumber) and Salmon Creek Corporation (Salmon Creek) have
released the escrowed monies received in connection with the Headwaters
Agreement.

Scotia Pacific and Salmon Creek are wholly owned subsidiaries of The Pacific
Lumber Company.

On March 1, 1999, Salmon Creek received $299.9 million in connection with the
Headwaters sale. Approximately $15 million of these proceeds were utilized to
cover certain transaction-related costs. The remaining $285 million was placed
into an escrow account which, after interest earnings and withdrawals in
connection with payments on the Scotia Pacific Timber Collateralized Notes
("Timber Notes"), totaled $292.9 million at the time of release.

In its decision to approve the Headwaters Agreement, the Board of Managers of
Scotia Pacific determined the funds placed in the escrow account should be
considered for release only under certain specified conditions. These conditions
included the receipt of an opinion from a nationally recognized investment
banking firm. Warburg Dillon Read LLC has delivered such an opinion in
connection with the actions being announced today.

Pacific Lumber has contributed $169 million of the released monies to Scotia
Pacific for the purpose of establishing a Scheduled Amortization Reserve Account
to support future principal payments on the Timber Notes. The Indenture
governing the Timber Notes has been amended to, among other things, establish
this Account. Amounts in that Account will be part of the collateral securing
the Timber Notes.

To the extent that amounts otherwise available to Scotia Pacific under the
Indenture are insufficient to pay Scheduled Amortization on the Class A-1 or
Class A-2 Timber Notes, or to amortize the Class A-3 Timber Notes during the six
years beginning January 20, 2014, as set forth in the Indenture Amendments,
amounts in the Scheduled Amortization Reserve Account will be used for that
purpose.

In determining the terms of the Scheduled Amortization Reserve, the Board of
Scotia Pacific considered, among other things, expected harvest levels, prices
and operating and capital expenditures of Scotia Pacific. The amount of the
Scheduled Amortization Reserve Account was established based upon assumptions
with respect to such factors at levels believed to be sufficient to provide
adequate funds to make the payments referred to above. In particular, the
harvest level associated with the establishment of the Scheduled Amortization
Reserve Account represents an approximate 30 percent decrease from Scotia
Pacific's base case harvest level of approximately 144 million board feet
equivalents (Mbfe), all other factors being equal.

Up to 50 percent of Remaining Funds (funds that could otherwise be released from
the Collection Account free of the lien of the deed of trust securing the Timber
Notes) is required to be used on each monthly deposit date to replenish the
Scheduled Amortization Reserve Account if it falls below the targeted balance
incorporated in the Indenture amendments. Funds may be released on a monthly
basis to Scotia Pacific from the Scheduled Amortization Reserve Account if the
amount in the Account exceeds the targeted balances.

In addition, the amendments to the Indenture generally provide that if Scotia
Pacific's harvest of timber during 18 consecutive calendar months equals or
exceeds a harvest level that is approximately 10 percent below Scotia Pacific's
base case harvest level, the inventory of timber covered by Scotia Pacific's
approved timber harvest plans equals or exceeds 100 million board feet, and no
advances are outstanding under Scotia Pacific's line of credit agreement (or
were outstanding as of the close of business on the previous note payment date),
the amount of the Scheduled Amortization Reserve Account will be reduced to an
amount that is consistent with a harvest level that is approximately 20 percent
below Scotia Pacific's base case harvest level, all other factors being equal.

A copy of the Supplemental Indenture that amends the Indenture will be filed
with the Securities and Exchange Commission today as an exhibit to a Scotia
Pacific Form 8-K. A copy of the Supplemental Indenture is also available from
the Company's Investor Relations Department by contacting (713) 267-3675.