On Friday, after a brief hearing to discuss the matter the previous day, the judge overseeing the Pacific Lumber Co.’s bankruptcy ordered the parties into mediation.

Judge Richard Schmidt instructed Marathon Structured Finance Fund, Mendocino Redwood Co., Beal Bank and the Indenture Trustee for the Timber Noteholders to participate in the mediation to assist the parties in settlement negotiations regarding plan confirmation.

Schmidt has indicated numerous times in court in recent weeks that the best reorganization plan to settle the case would be a compromise for a variation of the Marathon/MRC and Noteholders’ plans that deals with the PALCO’s mill, town and 210,000 acres of lands.

Marvin Isgur, a federal bankruptcy judge for the Southern District of Texas was appointed to lead the mediation set to take place in Houston beginning April 25 and continuing through April 26.

Schmidt also ordered the parties to prepare and forward position papers outlining the terms of the parties’ plans of reorganization and address any legal arguments that might prohibit confirmation of the opposing plans.

The papers are to be forwarded directly to Judge Isgur’s chambers by April 23.

PALCO attorneys, who have not presented their plan to the court, weren’t included in the mediation talks.

Frank Bacik, PALCO vice president and general counsel, said the company is aware of the mediation talks, but was unclear as of Friday afternoon whether the company would prepare and present statements.

The PALCO bankruptcy confirmation proceedings resume in Corpus Christi, Texas on April 29.