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Mammoth Lakes files bankruptcy

July 3, 2012

The Town Council of Mammoth Lakes Town voted unanimously on Monday to approve a bankruptcy filing, less than a month after Stockton filed for bankruptcy protection.

The council said it was the only option it had left after its largest creditor, Mammoth Lakes Land Acquisition, repeatedly refused to mediate its $43 million judgment against the town, and obtained a state court order requiring payment by June 30.

Mammoth Lakes Land Acquisition attorney Dan Brockett told Rueters the town was insincere about mediation and only offered to comply with the law. His client had offered to allow the town of about 8,000 residents to pay off the judgment in 30 years.

Brockett said his client plans to contest the town’s eligibility for bankruptcy.


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This was taken from the website page of Edwin Akhavan, Esq.:


“The decision stems from a 1997 agreement between a ski resort developer, Mammoth Lakes Land Acquisition, and the city. The agreement gave the developer the option to purchase land and develop a $400 million hotel in exchange for improving the local Yosemite airport. The city had a change of heart and backed out of the contract. The town’s residents place the blame for the large judgment on the city’s Town Council for their decision to not honor the contract terms.”


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Oh… if this is true what the previous poster wrote:


“The city lost a judgement in a court of appeals and had a monetary judgement awarded against them for some $30 million, which has ballooned up to the $43 million mark with interest and fees.”


I am reminded that you never fight a battle that you know you are going to lose…. unless losing is a victory…. maybe this was environmentalists committing suicide.


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“Oh … if this is true what the previous poster wrote: ” Um, Roger, you do know how to work “the google”, don’t you? What a lazy attempt at a snarky comment.


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Interesting trying to find out some facts about this case; apparently the private developer started to make improvements to the airport but the city found out that what was being done might jeopardize the airport retaining a certain status with the FAA that would allow for an extension of the runway to accommodate larger aircraft, so the city halted the other part of the agreement with the developer to build a large hotel on city property. The city lost a judgement in a court of appeals and had a monetary judgement awarded against them for some $30 million, which has ballooned up to the $43 million mark with interest and fees. It would be helpful for a little more depth to the story, but in my little two minute search I couldn’t find any stories with any more depth.


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Thanks, Bob, for the additional information. Maybe the developer should simply purchase the town and call it even? This would never happen here – remember how the council gave away the downtown property to the Copelands for a song?


No doubt there will be more bankruptcies coming. An article in the LA Times on June 27 discussed in detail what derailed Stockton and indicated this scenario is possible in many many more places. San Luis Obispo city has millions of dollars in unfunded pension liabilities and is considering a bond to refinance this debt (meaning, kick it down the road some more instead of dealing with its spending addiction).


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So if SLO can’t pay the unfunded pension liabilities, does that mean that they can take the city to court and sue, then take possession of the city if they win?


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Man, that developer is golden. He’ll get his Hotel, HE’LL decide regarding the longer runway deal effectively or if he decides, can walk away a multi-millionaire by doing nothing.


But taxpayers, city officials, resort owners. etc. will war. Poor Mammoth, it’s huge now,and liable to have a hellacious earthquake someday, now this.


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