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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman">SECURITIES
AND EXCHANGE COMMISSION</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Washington,
D.C.&#160;20549</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman">FORM
8-K</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Current
Report Pursuant to Section 13 or 15(d) of</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Securities Exchange Act of 1934</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date of
Report (date of earliest event reported): <font style="DISPLAY: inline; FONT-WEIGHT: bold">May 1</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">, 2008</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman">MAXXAM
INC.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
name of Registrant as Specified in its Charter)</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Delaware</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(State or
other jurisdiction of incorporation)</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1-3924</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Commission
File Number)</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">95-2078752</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(I.R.S.
Employer Identification Number)</font></div>
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    <div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">1330
      Post Oak Boulevard</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Suite
      2000</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Houston,
      Texas</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">(Address
      of Principal Executive Offices)</font></div>
            </td>
            <td align="left" valign="top" width="23%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            <td valign="top" width="22%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">77056</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">(Zip
      Code)</font></div>
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telephone number, including area code: <font style="DISPLAY: inline; FONT-WEIGHT: bold">(713) 975-7600</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Not
Applicable</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Former
name, former address and</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">former
fiscal year, if changed since last report)</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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:</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;&#160;&#160;&#61551;&#160;&#160;&#160;&#160;
</font>Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;&#160;&#160;&#61551;&#160;&#160;&#160;&#160;
</font>Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;&#160;&#160;&#61551;&#160;&#160;&#160;&#160;
</font>Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 10pt">&#160;&#160;&#160;&#61551;&#160;&#160;&#160;&#160;
</font>Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div><br>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
1.01&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Entry
into Material Definitive Agreement.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>Background</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">MAXXAM
Inc. (the <font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Company&#8221;</font>) has
previously disclosed that on January 18, 2007, The Pacific Lumber Company, an
indirect wholly owned subsidiary of the Company (<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Palco&#8221;</font>), and Palco&#8217;s
subsidiaries, including Scotia Pacific Company LLC (<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Scopac&#8221;</font>), filed separate
voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy
Code.&#160;&#160;Palco, Scopac and Palco&#8217;s other subsidiaries are collectively
referred to herein as the <font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Debtors</font>.<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8221;</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On the
January 30, 2008 deadline established by the Bankruptcy Court, the Debtors filed
an amended joint plan of reorganization (the <font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Joint Plan&#8221;</font>) with the
Bankruptcy Court.&#160;&#160;That same day, both Scopac, and Palco and its
subsidiaries other than Scopac (collectively, the <font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Palco Debtors&#8221;</font>), filed
separate alternative stand-alone plans of reorganization (the <font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Alternative
Plans&#8221;</font>).&#160;&#160;The Company was a co-proponent of the Joint Plan and
the Alternative Plans of both Scopac and the Palco Debtors.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Two other
plans of reorganization were filed on the January 30, 2008
deadline.&#160;&#160;The first was a plan (the <font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;MRC/Marathon Plan&#8221;</font>) proposed
(and later amended) by Mendocino Redwood Company (<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;MRC&#8221;)</font> and Palco&#8217;s principal
creditor, Marathon Structured Finance Fund L.P. (<font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Marathon&#8221;</font>).&#160;&#160;The
second was a plan (the <font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Noteholder Plan&#8221;</font>) proposed
(and later amended and modified) by the indenture trustee on behalf of the
holders (the <font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Timber
Noteholders&#8221;</font>) of Scopac&#8217;s $713.8 million principal amount (as of December
31, 2006) of Timber Collateralized Notes.&#160;&#160;The MRC/Marathon Plan would
reorganize and continue the businesses of the Debtors.&#160;&#160;It also
provides for virtually all of the creditor classes other than Marathon to
receive substantial cash payments.&#160;&#160;The Noteholder Plan effectively
provides for an auction of Scopac&#8217;s timberlands to the highest
bidder.&#160;&#160;It does not address the Palco Debtors.&#160;&#160;Both the
MRC/Marathon Plan and the Noteholder Plan would result in the loss entirely of
the Company&#8217;s indirect equity interests in Palco and Palco&#8217;s subsidiaries,
including Scopac.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Execution
of Settlement Term Sheet</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On May 1,
2008, MRC, Marathon, the Company and two other Company subsidiaries
(collectively, the <font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;MAXXAM
Entities&#8221;</font>), and the Palco Debtors entered into a Term Sheet Regarding
Global Settlement and Plan Support (the <font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Settlement Term
Sheet&#8221;</font>).&#160;&#160;&#160;&#160;Scopac was not a party to the Settlement
Term Sheet.&#160;&#160;A summary of the Settlement Term Sheet is set forth
below.&#160;&#160;As noted below, certain provisions of the Settlement Term
Sheet are dependent upon Bankruptcy Court approval, which will be sought by
motion (the <font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Settlement
Motion&#8221;</font>).&#160;&#160;Other provisions are dependent on the MRC/Marathon
Plan being confirmed by the Bankruptcy Court and becoming effective (or not
overturned upon appeal).&#160;&#160;There can be no assurance that the
Bankruptcy Court will approve the Settlement Motion.&#160;&#160;Nor can there be
any assurance that the MRC/Marathon Plan will be confirmed by the Bankruptcy
Court and become effective (or not overturned upon appeal).&#160;&#160;For
further information, please see the Settlement Term Sheet itself, which is
attached hereto as Exhibit 10.1 and incorporated herein by
reference.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">General
Provisions of Settlement Term Sheet</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Settlement Term Sheet required the Palco Debtors to immediately withdraw the
Palco Debtors&#8217; Alternative Plan.&#160;&#160;In addition, the MAXXAM Entities and
the Palco Debtors agreed to withdraw as co-proponents of any plan of
reorganization, including the Joint Plan and the Alternative Plans of the Palco
Debtors and Scopac.&#160;&#160;&#160;&#160;The MAXXAM Entities and Palco Debtors
also agreed to (a) express support for and use their best efforts to defend the
MRC/Marathon Plan, and (b) use their best efforts to oppose any competing plan
of reorganization.&#160;&#160;The Settlement Term Sheet also obligates the
Company to indemnify MRC, Marathon, Newco and their affiliates for certain tax
liabilities related to this transaction.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under the
Settlement Term Sheet, MRC and Marathon agreed to amend the terms of the
MRC/Marathon Plan, among other things, to provide for (i) a cash payment of not
less than $520 million to the Timber Noteholders in satisfaction of the Timber
Noteholders&#8217; bankruptcy claims, and (ii) assumption of Palco&#8217;s retirement plan
(the <font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Palco Retirement
Plan&#8221;</font>) by Newco upon the effective date of the MRC/Marathon
Plan.&#160;&#160;However, the latter provision would have no effect if the
MRC/Marathon Plan became effective but was subsequently overturned and unwound
upon appeal.&#160;&#160;The Settlement Term Sheet also provides that MRC and
Marathon must obtain the consent of the MAXXAM Entities and the Palco Debtors to
any further changes to the MRC/Marathon Plan that are either material or
adversely affect the MAXXAM Entities or the Palco Debtors.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">MRC
agreed to pay the Company $2.25 million in cash upon approval by the Bankruptcy
Court of a settlement based upon the Settlement Term Sheet (the <font style="DISPLAY: inline; FONT-WEIGHT: bold">&#8220;Settlement&#8221;</font>) and the
MRC/Marathon Plan becoming effective.&#160;&#160;Such cash payment would,
however, have to be refunded if the MRC/Marathon Plan was overturned and unwound
upon appeal.&#160;&#160;The Settlement Term Sheet also enables an affiliate of
the Company for a period of up to six weeks to require Newco or MRC to
re-purchase lumber that the affiliate had previously purchased from
Palco.&#160;&#160;In such event, Newco or MRC would initially be required to pay
the affiliate up to $3.9 million and up to another $1.3 million on the effective
date of the MRC/Marathon Plan.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-STYLE: italic; FONT-FAMILY: Times New Roman">Release
Provisions of Settlement Term Sheet</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
as of the date of execution of the Settlement Term Sheet, the MAXXAM Entities
granted a release in favor of MRC, Marathon and various related parties and MRC
and Marathon granted a release in favor of the MAXXAM Entities and various
related parties.&#160;&#160;Subject to certain exceptions relating to Marathon
and the MAXXAM Entities, the release covers any and all claims (a) that MRC,
Marathon or the MAXXAM Entities may currently have against any of the released
parties, or (b) relating to any of the Debtors or their bankruptcy cases that
may arise in the future.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
MAXXAM Entities, MRC and Marathon also released the Palco Debtors and various
related parties against any and all claims (y) that MAXXAM Entities, MRC and
Marathon may currently have against any of the released parties (including
approximately $40 million of intercompany indebtedness owed by the Palco Debtors
to the MAXXAM Entities), or (z) relating to any of the Debtors or their
bankruptcy cases that may arise in the future.&#160;&#160;The release by the
MAXXAM Entities is effective upon approval of the release by the Bankruptcy
Court.&#160;&#160;The release by MRC and Marathon is effective upon the later of
approval of the Settlement Motion by the Bankruptcy Court and the effective date
of the MRC/Marathon Plan.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
upon the later of approval of the Settlement Motion by the Bankruptcy Court and
the effective date of the MRC/Marathon Plan, the Palco Debtors released each
other, MRC, Marathon, the MAXXAM Entities and various related parties against
any and all claims (a) that the Palco Debtors may currently have against any of
the released parties, or (b) relating to any of the Debtors or their bankruptcy
cases that may arise in the future.</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
9.01.&#160;&#160;&#160;&#160;Financial Statements and Exhibits.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Exhibits</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">
          <tr>
            <td valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
      10.1</font></div>
            </td>
            <td valign="top" width="90%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Term
      Sheet Regarding Global Settlement and Plan Support among MRC, Marathon,
      the Palco Debtors, and the MAXXAM
Entities</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SIGNATURES</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">
          <tr>
            <td valign="top" width="43%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            <td colspan="2" valign="top" width="34%">
              <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">MAXXAM
      INC.</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="43%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            <td valign="top" width="4%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            <td valign="top" width="30%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
          </tr>
          <tr>
            <td valign="top" width="43%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Date:&#160;&#160;&#160;May
      5, 2008&#160;</font></div>
            </td>
            <td valign="top" width="4%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">By:</font></div>
            </td>
            <td valign="top" width="30%" style="BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">/s/&#160;Bernard
      L. Birkel</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="43%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            <td valign="top" width="4%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: -9.9pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Name:&#160;</font></div>
            </td>
            <td valign="bottom" width="30%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Bernard
      L. Birkel</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="43%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            <td valign="top" width="4%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Title:&#160;</font></div>
            </td>
            <td valign="top" width="30%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Secretary</font></div>
              <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25">&#160;</div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">0127FMS8.BLB</font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">
          <tr>
            <td colspan="2" valign="top" width="78%">
              <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">EXHIBIT
      INDEX</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="15%" style="BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline">Exhibit Number</font></font></div>
            </td>
            <td valign="top" width="63%" style="BORDER-BOTTOM: black 2px solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline">Description</font></font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="15%">
              <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">10.1</font></div>
            </td>
            <td valign="top" width="63%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">Term
      Sheet Regarding Global Settlement and Plan Support among Marathon,
      Mendocino, the Company, and the Palco
Debtors</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25">&#160;</div>
    <hr style="COLOR: black" noshade size="2"><br></body>
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maxxam_8k-050508.htm
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):
May 1
, 2008
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)
1330
      Post Oak Boulevard
Suite
      2000
Houston,
      Texas
(Address
      of Principal Executive Offices)
77056
(Zip
      Code)
Registrant's
telephone number, including area code:
(713) 975-7600
Not
Applicable
(Former
name, former address and
former
fiscal year, if changed since last report)
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:

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 14d-2(b) 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
1.01                         Entry
into Material Definitive Agreement.
Background
MAXXAM
Inc. (the
"Company"
) has
previously disclosed that on January 18, 2007, The Pacific Lumber Company, an
indirect wholly owned subsidiary of the Company (
"Palco"
), and Palco's
subsidiaries, including Scotia Pacific Company LLC (
"Scopac"
), filed separate
voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy
Code.  Palco, Scopac and Palco's other subsidiaries are collectively
referred to herein as the
"Debtors
.
"
On the
January 30, 2008 deadline established by the Bankruptcy Court, the Debtors filed
an amended joint plan of reorganization (the
"Joint Plan"
) with the
Bankruptcy Court.  That same day, both Scopac, and Palco and its
subsidiaries other than Scopac (collectively, the
"Palco Debtors"
), filed
separate alternative stand-alone plans of reorganization (the
"Alternative
Plans"
).  The Company was a co-proponent of the Joint Plan and
the Alternative Plans of both Scopac and the Palco Debtors.
Two other
plans of reorganization were filed on the January 30, 2008
deadline.  The first was a plan (the
"MRC/Marathon Plan"
) proposed
(and later amended) by Mendocino Redwood Company (
"MRC")
and Palco's principal
creditor, Marathon Structured Finance Fund L.P. (
"Marathon"
).  The
second was a plan (the
"Noteholder Plan"
) proposed
(and later amended and modified) by the indenture trustee on behalf of the
holders (the
"Timber
Noteholders"
) of Scopac's $713.8 million principal amount (as of December
31, 2006) of Timber Collateralized Notes.  The MRC/Marathon Plan would
reorganize and continue the businesses of the Debtors.  It also
provides for virtually all of the creditor classes other than Marathon to
receive substantial cash payments.  The Noteholder Plan effectively
provides for an auction of Scopac's timberlands to the highest
bidder.  It does not address the Palco Debtors.  Both the
MRC/Marathon Plan and the Noteholder Plan would result in the loss entirely of
the Company's indirect equity interests in Palco and Palco's subsidiaries,
including Scopac.
Execution
of Settlement Term Sheet
On May 1,
2008, MRC, Marathon, the Company and two other Company subsidiaries
(collectively, the
"MAXXAM
Entities"
), and the Palco Debtors entered into a Term Sheet Regarding
Global Settlement and Plan Support (the
"Settlement Term
Sheet"
).    Scopac was not a party to the Settlement
Term Sheet.  A summary of the Settlement Term Sheet is set forth
below.  As noted below, certain provisions of the Settlement Term
Sheet are dependent upon Bankruptcy Court approval, which will be sought by
motion (the
"Settlement
Motion"
).  Other provisions are dependent on the MRC/Marathon
Plan being confirmed by the Bankruptcy Court and becoming effective (or not
overturned upon appeal).  There can be no assurance that the
Bankruptcy Court will approve the Settlement Motion.  Nor can there be
any assurance that the MRC/Marathon Plan will be confirmed by the Bankruptcy
Court and become effective (or not overturned upon appeal).  For
further information, please see the Settlement Term Sheet itself, which is
attached hereto as Exhibit 10.1 and incorporated herein by
reference.
General
Provisions of Settlement Term Sheet
The
Settlement Term Sheet required the Palco Debtors to immediately withdraw the
Palco Debtors' Alternative Plan.  In addition, the MAXXAM Entities and
the Palco Debtors agreed to withdraw as co-proponents of any plan of
reorganization, including the Joint Plan and the Alternative Plans of the Palco
Debtors and Scopac.    The MAXXAM Entities and Palco Debtors
also agreed to (a) express support for and use their best efforts to defend the
MRC/Marathon Plan, and (b) use their best efforts to oppose any competing plan
of reorganization.  The Settlement Term Sheet also obligates the
Company to indemnify MRC, Marathon, Newco and their affiliates for certain tax
liabilities related to this transaction.
Under the
Settlement Term Sheet, MRC and Marathon agreed to amend the terms of the
MRC/Marathon Plan, among other things, to provide for (i) a cash payment of not
less than $520 million to the Timber Noteholders in satisfaction of the Timber
Noteholders' bankruptcy claims, and (ii) assumption of Palco's retirement plan
(the
"Palco Retirement
Plan"
) by Newco upon the effective date of the MRC/Marathon
Plan.  However, the latter provision would have no effect if the
MRC/Marathon Plan became effective but was subsequently overturned and unwound
upon appeal.  The Settlement Term Sheet also provides that MRC and
Marathon must obtain the consent of the MAXXAM Entities and the Palco Debtors to
any further changes to the MRC/Marathon Plan that are either material or
adversely affect the MAXXAM Entities or the Palco Debtors.
MRC
agreed to pay the Company $2.25 million in cash upon approval by the Bankruptcy
Court of a settlement based upon the Settlement Term Sheet (the
"Settlement"
) and the
MRC/Marathon Plan becoming effective.  Such cash payment would,
however, have to be refunded if the MRC/Marathon Plan was overturned and unwound
upon appeal.  The Settlement Term Sheet also enables an affiliate of
the Company for a period of up to six weeks to require Newco or MRC to
re-purchase lumber that the affiliate had previously purchased from
Palco.  In such event, Newco or MRC would initially be required to pay
the affiliate up to $3.9 million and up to another $1.3 million on the effective
date of the MRC/Marathon Plan.
Release
Provisions of Settlement Term Sheet
Effective
as of the date of execution of the Settlement Term Sheet, the MAXXAM Entities
granted a release in favor of MRC, Marathon and various related parties and MRC
and Marathon granted a release in favor of the MAXXAM Entities and various
related parties.  Subject to certain exceptions relating to Marathon
and the MAXXAM Entities, the release covers any and all claims (a) that MRC,
Marathon or the MAXXAM Entities may currently have against any of the released
parties, or (b) relating to any of the Debtors or their bankruptcy cases that
may arise in the future.
The
MAXXAM Entities, MRC and Marathon also released the Palco Debtors and various
related parties against any and all claims (y) that MAXXAM Entities, MRC and
Marathon may currently have against any of the released parties (including
approximately $40 million of intercompany indebtedness owed by the Palco Debtors
to the MAXXAM Entities), or (z) relating to any of the Debtors or their
bankruptcy cases that may arise in the future.  The release by the
MAXXAM Entities is effective upon approval of the release by the Bankruptcy
Court.  The release by MRC and Marathon is effective upon the later of
approval of the Settlement Motion by the Bankruptcy Court and the effective date
of the MRC/Marathon Plan.
Effective
upon the later of approval of the Settlement Motion by the Bankruptcy Court and
the effective date of the MRC/Marathon Plan, the Palco Debtors released each
other, MRC, Marathon, the MAXXAM Entities and various related parties against
any and all claims (a) that the Palco Debtors may currently have against any of
the released parties, or (b) relating to any of the Debtors or their bankruptcy
cases that may arise in the future.
Item
9.01.    Financial Statements and Exhibits.
(c)           Exhibits
10.1
Term
      Sheet Regarding Global Settlement and Plan Support among MRC, Marathon,
      the Palco Debtors, and the MAXXAM
Entities
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.
Date:   May
      5, 2008
By:
/s/ Bernard
      L. Birkel
Name:
Bernard
      L. Birkel
Title:
Secretary
0127FMS8.BLB
EXHIBIT
      INDEX
Exhibit Number
Description
10.1
Term
      Sheet Regarding Global Settlement and Plan Support among Marathon,
      Mendocino, the Company, and the Palco
Debtors