8-K

UNITED STATES

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):April 6, 2005

MAXXAM INC.

(Exact name of registrant as specified in its charter)

Delaware	1-3924		95-2078752
(State or other jurisdiction of incorporation or organization)	(Commission File Number)		(I.R.S. Employer Identification No.)
1330 Post Oak Boulevard Suite 2000 Houston, Texas		77056
(Address of principal executive offices)		(Zip Code)
Registrant's telephone number, including area code: (713) 975-7600

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01. Other Events.

As previously disclosed, the Registrant's indirectly wholly owned subsidiary, The Pacific Lumber Company ("Palco") and Palco's wholly owned subsidiary, Scotia Pacific Company LLC ("Scotia LLC"), have experienced delays and refusals by the California North Coast Regional Water Quality Control Board (the "North Coast Water Board") and its staff in granting clearance to operate in the Freshwater and Elk River watersheds under timber harvesting plans ("THPs") already approved by the California Department of Forestry ("CDF") and other state and federal regulatory agencies which review their THPs. On February 25, 2005, the Executive Officer of the staff of the North Coast Water Board enrolled THPs that would allow Palco and Scotia LLC to harvest up to 50% of the harvest limit established by the CDF for the Freshwater and Elk River watersheds. On March 16, the North Coast Water Board ordered (the "March 16 Order") that additional THPs be enrolled that would allow the harvest of up to 75% of the harvest limit established by the CDF for the Freshwater and Elk River watersheds.

Following an appeal of the March 16 Order to the State Water Resources Control Board (the "State Water Board"), on April 6, 2005, a hearing officer acting on behalf of the State Water Board issued an order staying the enrollment of the additional THPs under the March 16 Order. Palco and Scotia LLC are currently reviewing this order and seeking to determine its operational implications and its impact on the companies' financial liquidity conditions. Based on their preliminary review, it appears that, if the stay order is not promptly reversed or overruled, Scotia LLC's cash flows from operations, together with funds available under its line of credit, will not be adequate to allow it to pay the entire amount of interest due on the July 20, 2005 payment date for its Timber Notes. Also as previously disclosed, Palco is facing a financial liquidity crisis, is currently in default under its credit agreement and has received a limited waiver, through April 15, 2005, of the default. Palco is seeking a more permanent solution to its default and liquidity crisis. The stay order, if not promptly reversed or overruled, could adversely affect these refinancing efforts.

Unless Palco is successful in its efforts to secure a more permanent solution to its default and liquidity crisis, Scotia LLC is able to avoid default on its Timber Notes, and Palco and Scotia LLC are successful in their efforts to obtain clearance to operate under sufficient additional THPs, Palco and its subsidiaries, including Scotia LLC, expect that they will be forced to take extraordinary actions, which may include: reducing expenditures by laying off employees and shutting down various operations; seeking other sources of liquidity, such as from asset sales; and seeking protection by filing under the United States Bankruptcy Code. In this regard, on March 31, 2005, Palco laid off 21 lumber operations employees and reduced operations in some departments to a four-day workweek.

On April 6, 2005, Palco issued a press release regarding the April 6 stay order, a copy of which is attached as Exhibit 99.1 to this Form 8-K and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

c) Exhibits

Exhibit Number	Description
99.1	Press Release of Palco dated April 6, 2005 (filed herewith).

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:	April 7, 2005		MAXXAM INC.
		By:		/s/ Bernard L. Birkel
		Name:		Bernard L. Birkel
		Title:		Secretary & Senior Assistant General Counsel

EX-99

Exhibit 99.1

PALCO News Release

FOR IMMEDIATE RELEASE April 6, 2005

For further information, contact:

Chuck Center

Director of Government and Community Relations

Tel: (707) 764-4132

STATE BOARD MEMBER'S DECISION DISREGARDS

FULL NINE MEMBER NORTHCOAST REGIONAL WATER BOARD

AND CAUSES PALCO AND CONTRACTORS FURTHER HARM

Expressing disappointment with today's decision, Robert E. Manne, President and CEO of PALCO, stated that, "This seemingly arbitrary decision creates even more uncertainty for our company, our employees, and our future.

"We find it disheartening that the state would choose to consider financially harm a 140-year-old company whose Habitat Conservation Plan has made it the industry leader in the state of California when it comes to environmentally sensitive forest management and science. In addition, we are a company who is the holder of the state's oldest active Workers' Compensation certificate. This is even more disappointing, when you realize that this stay overruns the considered decision of the Regional Water Board, which has been working on this issue for months. The burden of proof was on the petitioners, yet they did not show that any environmental harm would result from our logging nor did the board adequately consider the economic harm to PALCO if the stay was granted. The decision further failed to recognize the economic harm to our logging contractors who will suffer financial losses and be forced to layoff employees as result of this stay," stated Manne.

Manne further noted, "This decision must be very disappointing to the Schwarzenegger Administration, to the five newly-appointed Regional Water Board members, and to the entire nine person board who considered this same matter and with the same opponents at an exhausting hearing on March 16, and then adopted and approved our additional harvest plans in Elk and Freshwater. These harvest plans had already been approved by the state and federal agencies who oversee our forest management plans and HCP. Now, their decision is invalidated by one individual from the State Water Quality Control Board. We think this sends a terrible signal to the newly-appointed Regional Water Board."

Manne finally noted that, "As far as our lenders are concerned, we have to discuss this with our lenders and we do not know how they will react. PALCO will request an immediate appeal to the full State Water Board, and we are confident that the full board will overturn this one individual member's decision. In the meantime, we are evaluating our options and doing everything we can to overcome this setback."

                                                                                        - 30 -