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): October 18, 2002



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




                                    DELAWARE
                 (State or other jurisdiction of incorporation)




                                     1-3924
                            (Commission File Number)




                                   95-2078752
                     (I.R.S. Employer Identification Number)




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

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


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ITEM 5.  OTHER EVENTS AND REGULATION FD DISCLOSURE

      Attached hereto as Exhibit 99.1 is a press release which the Registrant
issued on October 18, 2002 regarding settlement of the OTS action described in
prior filings by the Registrant. Also attached hereto as Exhibits 99.2 and 99.3,
respectively, are (i) an Opinion and Order Accepting Offer of Settlement by
MAXXAM Inc., Federated Development Co. and Charles E. Hurwitz and (ii) a Release
related to the foregoing press release.


                                   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.



                                                  MAXXAM INC.
                                                 (Registrant)


Date: October 18, 2002      By:             /s/ Bernard L. Birkel
                               ------------------------------------------------
                                               Bernard L. Birkel
                                Secretary and Senior Assistant General Counsel





                                  EXHIBIT INDEX


Exhibit 99.1:   Press Release dated October 18, 2002

Exhibit 99.2:   Opinion and Order Accepting Offer of Settlement by MAXXAM Inc.,
                Federated Development Co. and Charles E. Hurwitz

Exhibit 99.3:   Release

EX-99

                                                                October 18, 2002

                                                               Media: Josh Reiss
                                                                  (713) 267-3740
                                                            Investors: Ron Kurtz
                                                                  (713) 267-3686



                     MAXXAM INC. VINDICATED BY SETTLEMENT OF
               OFFICE OF THRIFT SUPERVISION ADMINISTRATIVE ACTION

                  Company to Pursue Counterclaim and Sanctions
                Against the Federal Deposit Insurance Corporation


         HOUSTON (October 18, 2002) - MAXXAM Inc. and its Chairman and CEO
Charles Hurwitz have reached a settlement with the Office of Thrift Supervision
(OTS), concluding a six-year administrative action regarding United Savings
Association of Texas (USAT), a savings and loan that went into receivership in
December 1988 during the S&L crisis that bankrupted most Texas thrifts.

         The settlement allows the company to achieve three important
objectives. First, it brings the OTS action to closure on very favorable terms
and ends further financial expenditures on the matter. Second, it should bring
an end to the Federal Deposit Insurance Corporation's (FDIC) claim against Mr.
Hurwitz, a claim that the FDIC made contingent upon the OTS prevailing in its
action. Third, it allows the company to intensify legal actions it has filed
against the FDIC in federal court for violating federal appropriations laws and
pursuing politically motivated litigation.

         The settlement follows a landmark Recommended Decision by
Administrative Law Judge Arthur Shipe (issued on September 12, 2001) that the
OTS should dismiss all of its charges against MAXXAM and Mr. Hurwitz. The trial
before Judge Shipe was the longest and most expensive in the history of the OTS,
including 110 days of trial spread out over more than two years.

         It also occurs fifteen months after a U.S. House of Representatives
Task Force Report detailed numerous contacts by the FDIC and OTS -- many
conducted prior to the filing of their respective lawsuits -- with the Interior
Department, White House Council on Environmental Quality, members of Congress,
the Office of Management and Budget, and certain environmental organizations to
develop a strategy that would use the lawsuits as leverage in order to force a
so-called "debt for nature swap." This swap would have forced MAXXAM to trade
valuable timberlands owned by a company subsidiary to the federal government in
exchange for relief from the agencies' litigation.

         Commenting on the settlement, MAXXAM Vice Chairman and General Counsel
J. Kent Friedman said, "This represents the vindication of MAXXAM and Mr.
Hurwitz that we have for years said should be the final outcome of the OTS
matter."

         In its motion for sanctions and counterclaim pending against the FDIC
in federal court in Houston, the company alleges that the FDIC, having concluded
that its own claims were inherently weak, improperly used its own funds to
finance the OTS administrative proceeding over the same set of facts presented
by the FDIC in its litigation.

         Mr. Friedman added that resolution of MAXXAM's counterclaim and motion
for sanctions that have been pending before U.S. District Court Judge Lynn
Hughes for several years has likely been delayed due to a statute that prohibits
a federal judge from taking any action that might affect an OTS administrative
proceeding.

         "Our day to be heard by Judge Hughes has arrived. We intend to
vigorously pursue our claims and demonstrate to the court that the FDIC broke
federal appropriations laws, pursued politically motivated litigation, and
should be sanctioned for its conduct," Friedman said.



                                   160-101802


Company press releases may contain statements that constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. The company cautions that any such forward-looking statements are not
guarantees of future performance and involve significant risks and
uncertainties, and that actual results may vary materially from those expressed
or implied in the forward-looking statements as a result of various factors.




                         HIGHLIGHTS OF SETTLEMENT TERMS

o        MAXXAM and Mr. Hurwitz make no admission of wrongdoing.
o        MAXXAM agrees that it will not pursue legal action against the OTS or
         its employees as part of its counterclaim against the FDIC.
o        The OTS agrees to drop its administrative action and will not pursue
         any further legal actions against the respondents with regard to this
         matter.
o        Of the approximately $821 million sought by the OTS, the respondents
         will pay the OTS $206,000. The OTS spent in excess of $4 million
         pursuing its claim. Thus the settlement represents approximately three
         hundredths of one percent of the amount sought by the OTS in its
         administrative action.
o        The respondents have voluntarily undertaken to accept for three years
         certain restrictions with respect to insured financial institutions
         (including not becoming a controlling shareholder or otherwise serving
         as an institution-affiliated party). MAXXAM does not believe that these
         restrictions are meaningful as it has no present or contemplated
         intention to engage in any of these activities.
o        The OTS agrees that the record basis for the administrative action
         includes the Recommended Decision of Administrative Law Judge Arthur
         Shipe. As a result, MAXXAM expects to use the Recommended Decision in
         its counterclaim and motion for sanctions before U.S. District Court
         Judge Lynn Hughes.

EX-99

                            UNITED STATES OF AMERICA,
                                   BEFORE THE
                          OFFICE OF THRIFT SUPERVISION
                           DEPARTMENT OF THE TREASURY



- ------------------------------------------------
IN THE MATTER OF                                 )
                                                 )
UNITED SAVINGS ASSOCIATION OF TEXAS,             )
AND UNITED FINANCIAL GROUP, INC.                 )
- ------------------------------------------------ )
                                                 )
MAXXAM INC.,                                     )
                                                 )
FEDERATED DEVELOPMENT CO,                        )           OTS ORDER
                                                 )           NO. AP-2002-2
AND CHARLES E. HURWITZ,)                         )
                                                 )           DATE: OCTOBER 18, 2002
RESPONDENTS.                                     )
- ------------------------------------------------ )



                           OPINION AND ORDER ACCEPTING
                      OFFER OF SETTLEMENT BY MAXXAM, INC.,
                FEDERATED DEVELOPMENT CO. AND CHARLES E. HURWITZ


      WHEREAS, the Office of Thrift Supervision ("OTS") has issued a Notice of
Charges ("Notice"), OTS Order No. AP 95-40, December 26,1995, against
Respondents MAXXAM, Inc., Federated Development Co., and Charles E. Hurwitz
(collectively, the "Respondents"), and others, asserting certain enforcement
claims arising out of the Respondents' participation in the affairs of United
Savings Association of Texas, Houston, Texas ("USAT") and United Financial
Group, Inc., Houston, Texas ("UFG"); and

      WHEREAS, the Respondents have submitted an Offer of Settlement ("Offer")
in the above-captioned proceeding;

      NOW, upon consideration, the OTS has determined to accept the Offer.1
Solely on the basis of the consent evidenced by the Offer, the OTS ORDERS THAT:

      1. The Respondents shall not engage in any unsafe or unsound practice, or
breach any fiduciary duty, with respect to the operation or supervision of any
insured financial institution, or violate any laws, rules or regulations
governing the operation or supervision of any insured financial institution.

      2. At any time that Charles E. Hurwitz serves as a director, officer, or
employee of an insured financial institution, or otherwise serves as an
institution-affiliated party of an insured depository institution, he shall not
participate, directly or indirectly, in the review, consideration,
recommendation, or approval of:

      (a)   the purchase or sale of mortgage-backed securities or high yield
            bonds;

      (b)   any investment decisions or policies;

      (c)   any application or report submitted to an insured depository
            institution's appropriate Federal banking agency, including the
            preparation or transmittal of any such application or report;


      (d)   loans or investments involving commercial real estate.


      3. Respondents, separately or acting in concert with one or more persons
or companies, shall not be a controlling shareholder of an insured financial
institution.

      4. Charles E. Hurwitz shall provide a copy of this Order to any insured
financial institution prior to accepting or commencing a position as a director,
officer, employee or consultant to such institution.

      5. The Respondents shall pay to the Savings Association Insurance Fund the
sum of Two Hundred Six Thousand Dollars ($206,000.00). This sum shall be paid by
cashiers' check or bank draft made payable to the OTS and hand-delivered to
Richard C. Stearns, Enforcement Deputy Counsel, OTS, 1700 G Street, N.W.,
Washington, D.C. 20552. The payment shall be made simultaneously with the
issuance of this Order.

      6. Definitions:

      (a)   "Appropriate Federal banking agency" shall have the meaning set
            forth in 12 U.S.C.ss.1813(q).

      (b)   "Insured financial institution" refers to any and all of the
            following: any "insured depository institution" as that term is
            defined at 12 U.S.C.ss.1813(c) (including but not limited to banks
            and savings associations); any direct or indirect subsidiary of an
            insured depository institution, whether wholly or partly owned, as
            that term is defined at 12 U.S.C.ss.1813(w)(4); any "insured credit
            union" within the meaning of 12 U.S.C.ss. 1752(7); any "savings and
            loan holding company" within the meaning of 12 U.S.C.ss.
            1467a(a)(l); and any "bank holding company" within the meaning of 12
            U.S.C.ss.1841.

      (c)   "Insured depository institution" shall have the meaning set forth in
            12 U.S.C.ss.1813(c)(2) and (c)(3).

      (d)   "Institution-affiliated party" shall have the meaning set forth in
            12 U.S.C.ss.1813(u).

      (e)   "Controlling shareholder" shall have the meaning set forth in 12
            C.F.R.ss.574.2(g).

      (f)   All other technical words or terms used in the Offer or in this
            Order, for which meanings are not specified or otherwise provided by
            the provisions of the Offer or this Order shall, insofar as
            applicable, have meanings as defined in Chapter 12 of the Code of
            Federal Regulations, the Home Owners' Loan Act ("HOLA"), or the
            Federal Deposit Insurance Act ("FDIA"). Any such technical words or
            terms used in the Offer or in this Order and undefined in the Code
            of Federal Regulations, HOLA, or FDIA shall have meanings that are
            in accordance with the best custom and usage in the savings and loan
            industry.

      7. Reference in the Offer or this Order to provisions of statutes,
regulations, OTS publications, and regulatory guidance shall be deemed to
include reference to all amendments to such provisions as have been made as of
the date of this Order.

      8. The section headings in the Offer and in this Order are for convenience
only and shall not affect the construction thereof.

      9. In case any provision of the Offer or this Order is ruled to be
invalid, illegal, or unenforceable by decision of any court of competent
jurisdiction, the validity, legality, and enforceability of the remaining
provisions thereof shall not in any way be affected or impaired thereby.

      10. The terms of the Offer shall be incorporated into this Order as if set
forth separately therein. The Offer and this Order may be used in any proceeding
brought by the OTS to enforce this Order.

      11. The terms and provisions of this Order shall be binding upon, and
shall inure to the benefit of the Respondents and the OTS ("the parties hereto")
and their successors in interest. Nothing in the Offer or this Order, express or
implied, shall give to any person or entity, other than the parties hereto, and
their successors, any benefit, legal or equitable right, remedy, or claim, nor
impose any legal or other restrictions or obligations upon any person or entity
that is not a party to the Offer and this Order.

      12. This Order constitutes the final disposition of all monetary and
non-monetary claims for relief that have been or could have been brought by the
OTS against the Respondents in connection with the Notice and any aspect of
their participation in the conduct of the affairs of USAT, UFG, MAXXAM or
Federated. All OTS proceedings against the Respondents relating to the Notice
are terminated upon issuance of this Order and no further proceedings against
the Respondents relating to the Notice or any aspect of their participation in
the conduct of the affairs of USAT, UFG, MAXXAM or Federated shall be commenced,
other than to enforce the terms of this Order.

      13. Except as set forth in paragraph 14, OTS, for itself, for its legal
representatives, predecessors, successors, and assigns, and for all persons,
agencies or entities in privity with it, does hereby remise, give up,
quit-claim, settle, compromise, forever discharge and fully, generally and
unconditionally release, acquit and forever discharge each of the Respondents,
their assigns, successors, predecessors, subsidiaries, affiliates, officers,
directors, agents, employees, servants, attorneys and other representatives,
from any and all claims, suits, controversies, accounts, covenants, promises,
judgments, damages, executions, causes of action, rights, duties, debts,
liabilities, demands, obligations, contracts, agreements, costs, and actions of
any kind and character, at law or in equity (including claims brought under
statutes and regulations of the United States or any agency of the United
States), whether or not well founded in law or fact, whether known or unknown,
suspected or unsuspected, direct or indirect, relating to, arising out of, or in
connection with the ownership or operation of USAT, UFG, MAXXAM or Federated,
and any of their subsidiaries or affiliates including, without limitation,
claims that were asserted or which could have been asserted in the
administrative proceeding commenced by the Notice or in any other court, forum
or proceeding. The OTS expressly warrants to the Respondents that no claims,
demands, controversies, actions, causes of action, liabilities, damages,
injuries, losses, or other rights of OTS that otherwise would fall within the
subject matter of the Notice have been assigned, conveyed, or in any manner
transferred to any person, agency or entity.

      14. The OTS does not undertake to settle, release or relinquish any claims
of the Federal Deposit Insurance Corporation ("FDIC"), acting in any capacity,
its officers, directors, agents, servants employees, attorneys or other
representatives, specifically including but not limited to claims asserted by
the FDIC in the civil action captioned FDIC v. Hurwitz, United States District
Court for the Southern District of Texas, No. 95-3956.

      15. The Respondents have executed and delivered to the OTS a written
release in the form attached as Exhibit A to the Offer ("Release") of the OTS,
its officers, directors, agents, servants, employees, attorneys and other
representatives, but not the FDIC, from all claims and counterclaims that have
been or may be asserted against them arising out of or in away way related to
the Respondents, USAT, UFG, MAXXAM or Federated, including, but not limited to
the subject matter of the administrative proceeding commenced by the Notice, and
in FDIC v. Hurwitz, et al., Civil No. H-95-3956, in the United States District
Court for the Southern District of Texas, including all claims and counterclaims
against the OTS (as defined in the Release) for costs, fees and sanctions.

      16. This Order is effective upon issuance by the OTS, acting through its
authorized representative, as indicated by the date in the caption of this
Order. Paragraphs 1 through 5 of this Order shall expire three (3) years
following the date of this Order, unless earlier suspended or terminated in
writing by the OTS, acting through its authorized representative.


Date:    10/17/02                                    /s/ James E. Gilleran
                                                 ----------------------------
                                                 James E. Gilleran
                                                 Director
                                                 Office of Thrift Supervision

- ----------------

1     In the Offer, solely for purposes of this proceeding and without admitting
      or denying the allegations of the Notice, and without any final
      adjudication of the facts or law, Respondents acknowledge service of the
      Notice; admit the jurisdiction of the OTS with respect to the matters set
      forth in the Notice; waive all further post-hearing procedures, judicial
      review of the Opinion and Order Accepting Offer of Settlement ("Order") by
      any court as provided by 12 U.S.C. ss. 1818(h) or otherwise, challenges to
      the validity of this Order, any objection to the staff's participation in
      the OTS's consideration of the Order, and any and all claims for the award
      of fees, costs or expenses against the OTS arising under common law or
      under the Equal Access to Justice Act, 5 U.S.C. ss. 2412; and stipulate
      that the record basis for this proceeding consists of the Notice, the
      Answers thereto, the hearing held in this matter and the evidence admitted
      therein, the Recommended Decision of the Administrative Law Judge, the
      post-hearing filings of the parties hereto, and the Offer.

EX-99

                                     RELEASE

      1. Except as set forth in paragraph 2, MAXXAM Inc., Federated Development
Company, and Charles E. Hurwitz (collectively, the "Respondents"), for
themselves, for their legal representatives, predecessors, successors, and
assigns, and for all persons, agencies or entities in privity with them, do
hereby remise, give up, quit-claim, settle, compromise, forever discharge and
fully, generally and unconditionally release, acquit and forever discharge the
Office of Thrift Supervision, including its assigns, successors, predecessors,
subsidiaries, affiliates, officers, directors, agents, employees, servants,
attorneys and other representatives ("OTS"), from any and all claims, suits,
controversies, accounts, covenants, promises, judgments, damages, executions,
causes of action, rights, duties, debts, liabilities, demands, obligations,
contracts, agreements, costs, and actions of any kind and character, at law or
in equity (including claims brought under statutes and regulations of the United
States or any agency of the United States), whether or not well founded in law
or fact, whether known or unknown, suspected or unsuspected, direct or indirect,
relating to, arising out of, or in connection with the ownership or operation
of, or with any activities of, United Savings Association of Texas, Houston,
Texas ("USAT"), United Financial Group, Houston, Texas ("UFG"), MAXXAM, Inc., or
Federated Development Company, or of any activities of the OTS with respect to
the Respondents, including, without limitation, claims that were asserted or
which could have been asserted in the administrative proceeding captioned In the
Matter of United Savings Association of Texas, OTS Order No. 95-40 (December
26,1995), or in the civil action captioned FDIC v. Hurwitz, No. 95-3956, United
States District Court for the Southern District of Texas, or in any other court,
forum or proceeding. The Respondents expressly warrant to the OTS that no
claims, demands, controversies, actions, causes of action, liabilities, damages,
injuries, losses, or other rights of the Respondents that otherwise would fall
within the subject matter of the above-captioned administrative proceeding or
civil action have been assigned, conveyed, or in any manner transferred to any
person, agency or entity.

      2. The Respondents do not undertake to settle, release or relinquish any
claims against any person or entity other than the OTS, its assigns, successors,
predecessors, subsidiaries, affiliates, officers, directors, agents, employees,
servants, attorneys and other representatives. Respondents specifically do not
undertake to release or relinquish claims against the FDIC (acting in any
capacity), its officers, directors, agents, servants, employees, attorneys or
other representatives.


/s/ Charles E. Hurwitz
- -----------------------------
Charles E. Hurwitz

Date:  October 16, 2002



MAXXAM, Inc.


By:    /s/ Paul N. Schwartz
       ------------------------


Date:  October 16, 2002



FEDERATED DEVELOPMENT COMPANY


By:    /s/ Charles E. Hurwitz
       ------------------------

Date:  October 16, 2002