While Scotia Pacific Co. moved forward with expert testimony for its reorganization plan, there were no major developments in federal bankruptcy court Wednesday on the surprise deal announced the previous day.

Pacific Lumber Co. attorney Shelby Jordan told Judge Richard Schmidt that he had worked most of the night hammering out the agreement he asked the court to conclude early on Tuesday to allow the parties to talk.

“It was well worth the time,” Jordan said.

Although there are no details revealed, the deal is apparently being negotiated between PALCO, its parent company MAXXAM Inc. and Mendocino Redwood Co., which has a competing plan for reorganizing the bankrupt company with PALCO creditor Marathon Structured Finance Fund.

Jordan said he believes that enough negotiations have taken place between the attorneys that the companies’ boards of directors were involved.

Leading off the testimony Wednesday was Kimberly Iles, a timber inventory expert who worked for SCOPAC nearly a decade ago and was rehired for the bankruptcy to check the timber inventory and the growth rates of the 210,000 acres of timberlands.

Iles was repeatedly questioned by Marathon attorney David Neier on his calculations and sampling of 96 plot of trees to arrive at his estimated 4.3 billion board feet of inventory, which was used by other experts independently to justify the approximately $1 billion value of SCOPAC’s lands.

Neier challenged Iles’ calculations whose margin of error could skew the total inventory down by 500 million board feet on the high end and 430 million board feet on the low end.

However, a SCOPAC attorney argued that the margin of error could just as easily swing the opposite way and increase the inventory by the same amounts.

Also taking the stand was Don Reimer, a forest management expert who was hired for the bankruptcy to develop a 50-year harvest schedule for the timberlands based on a sustainable harvesting that maximized cash flow.

Under Reimer’s schedule, higher value redwood trees would be harvested as much as possible and Douglas fir trees would be replaced with “cultivars,” or cloned redwoods, which Reimer said grow faster and produce a higher volume of wood.

During the life of his 50-year projection, Reimer said he expects to see the timberlands converted from 57 percent to 73 percent redwood trees.

In addition to being challenged on his lack of redwood forest experience, Timber Noteholder attorney Todd Shields questioned Reimer’s modeling he argued significantly overestimated realistic harvest levels.

Shields said the model is only as good as the data inputted which was provided in large part by SCOPAC.

“Garbage in, garbage out — right?” Sheilds asked.

Also testifying was James Yerges who was hired to calculate the total value of SCOPAC’s lands, which has been one of the main issues contended in the case.

Yerges said his calculations put an estimate of SCOPAC’s lands at $941 million, which excludes the approximately 7,000 acres designated as marbled murrelet conservation areas, but did include the 22,000 acres identified for the controversial development of residential homes.

Last on the stand was Thomas Lumsden, a financial valuation expert hired by SCOPAC to estimate the value of the legal claims in its litigation alleging violations by the state of California in the 1999 Headwaters Agreement.

Although he said he wasn’t qualified to offer an opinion on the merits of the litigation, Lumsden testified the value of the claims that PALCO and SCOPAC could recoup were upwards of $251 million and $398 million respectively.

A tentative ruling issued by the court in March has moved the case along with the majority of the companies’ claims, including breach of contract, and is scheduled to be heard in California in Superior Court in Fresno on Jan. 26.

Expected to take the stand today are SCOPAC and PALCO executives Jeffrey Barrett and Gary Clark in the hearings that begin at 9 a.m. in Corpus Christi, Texas.