The High Sierra town of Mammoth Lakes said Monday that it filed for
bankruptcy because it cannot afford to pay a $43-million
breach-of-contract judgment against it brought by a developer.
In a prepared statement, Mammoth Lakes officials said "bankruptcy, unfortunately, is the only option left" for the town, whose largest creditor, Mammoth Lakes Land Acquisition, had won a state court order requiring full payment by June 30, 2012.
Facing a judgment nearly three times the size of its annual operating budget and a $2.8-million shortfall in its 2011-12 fiscal year, the town had already cut many services and asked employees to take reductions in pay. Compounding problems, the adjacent Mammoth Mountain ski resort was forced to lay off 70 full-time employees last year due to a dearth of snow.
A breakdown in negotiations with the developer was the last straw.
The town plans to ask the bankruptcy court to approve a payment plan it claims is the most it can afford without jeopardizing the safety of residents and tourists: $500,000 a year over the next 10 years.
In the meantime, officials said the town of 7,700 permanent residents, about 300 miles north of Los Angeles, will remain open for business, and local police and fire departments will continue to provide “high levels of response and care.”
Mammoth Hospital, the Mammoth Community Water District and Mono County are separate from the town and are not affected, officials said.
Read more: http://latimesblogs.latimes.com/lanow/2012/07/mammoth-lakes-bankruptcy.html
In a prepared statement, Mammoth Lakes officials said "bankruptcy, unfortunately, is the only option left" for the town, whose largest creditor, Mammoth Lakes Land Acquisition, had won a state court order requiring full payment by June 30, 2012.
Facing a judgment nearly three times the size of its annual operating budget and a $2.8-million shortfall in its 2011-12 fiscal year, the town had already cut many services and asked employees to take reductions in pay. Compounding problems, the adjacent Mammoth Mountain ski resort was forced to lay off 70 full-time employees last year due to a dearth of snow.
A breakdown in negotiations with the developer was the last straw.
The town plans to ask the bankruptcy court to approve a payment plan it claims is the most it can afford without jeopardizing the safety of residents and tourists: $500,000 a year over the next 10 years.
In the meantime, officials said the town of 7,700 permanent residents, about 300 miles north of Los Angeles, will remain open for business, and local police and fire departments will continue to provide “high levels of response and care.”
Mammoth Hospital, the Mammoth Community Water District and Mono County are separate from the town and are not affected, officials said.
Read more: http://latimesblogs.latimes.com/lanow/2012/07/mammoth-lakes-bankruptcy.html
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