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)         August 28, 2001
                                                  ------------------------------

                             PAYLESS CASHWAYS, INC.
- --------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         DELAWARE                    0-4437                    42-0945849
- --------------------------- ----------------------- ----------------------------
(State or other jurisdiction       (Commission                (IRS Employer
      of incorporation)             File Number)            Identification No.)


800 NW Chipman Road, Suite 5900
P.O. Box 648001
Lee's Summit, Missouri                                  64064-8001
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(Address of principal executive offices)                (Zip Code)



Registrant's telephone number, including area code           (816) 347-6000
                                                   -----------------------------



                                 Not applicable
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          (Former name or former address, if changed since last report)







Item 3. Bankruptcy or Receivership

     Payless Cashways, Inc. today issued a press release announcing that
liquidation is likely.

           (c)    EXHIBIT.  The following exhibit is filed herewith:

           99.1   Press Release dated August 28, 2001.






                                    SIGNATURE

     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:  August 28, 2001
                                      PAYLESS CASHWAYS, INC.


                                      By:  /s/ Richard B. Witaszak
                                          --------------------------------------
                                         Richard B. Witaszak, Senior Vice
                                         President - Finance and Chief
                                         Financial Officer

EX-99.1

EXHIBIT 99.1


FOR IMMEDIATE RELEASE                   [GRAPHIC OMITTED]

Contact:    MARLA HOLBERT
            Communications Specialist
            (816) 347-6771
            mholbert@payless.cashways.com

            RICH WITASZAK
            Senior Vice President-Finance and Chief Financial Officer
            (816) 347-6974
            rwitaszak@payless.cashways.com

                PAYLESS CASHWAYS, INC. ANNOUNCES LIQUIDATION LIKELY

KANSAS CITY, MO - August 28, 2001 - Payless Cashways, Inc. (OTC: PCSH) officials
have announced that the company is currently in discussions with its secured
lenders as to the appropriate course of action to fund the orderly liquidation
of the company. The company expects to reach an agreement within the next few
days.

As of June 4, 2001, the company has been operating as a debtor-in-possession,
pursuant to a voluntarily filed petition to reorganize under Chapter 11 of the
Bankruptcy Code, in an attempt to reorganize the company's business and to
restructure its debt and other liabilities. Despite all of its efforts to obtain
adequate trade credit support, attract outside sources of capital and/or find a
viable buyer for either the company or its assets, the company was unable to do
so and does not expect to be able to do so in the future. As a result of this
and the continued deterioration of overall borrowing availability and sales, the
company has determined that the most prudent course of action is an orderly
liquidation under Chapter 11 of the Bankruptcy Code.

Forward-Looking Statements

Forward-looking statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. There are certain
important factors that could cause results to differ materially from those
anticipated by the forward-looking statements made above. These statements are
based on the current plans and expectations of the company. Investors are
cautioned that all forward-looking statements involve risks and uncertainty.
Among the factors that could cause actual results to differ materially are the
following: continued vendor and financial institutional support; stability of
customer demand; commodity prices, specifically lumber and wallboard; the
strength of the commercial real estate market, competitor activities; interest
rates; supplier support; stability of the work force; consumer spending and debt
levels; new and existing housing activity; product and customer mix; growth of
certain market segments; weather; the need for bankruptcy court approval; the
success of the company's reorganization plan once filed and approved; and an
excess of retail space devoted to the sale of building materials. Additional
information concerning these and other factors is contained in the company's
Securities and Exchange Commission filings, which are available by contacting
the company. The information can also be obtained from the company's Web site,
www.payless.cashways.com.

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