Town of Mammoth Lakes Files For Bankruptcy
Times are tough for Mammoth Lakes, the mountain resort town where Angelenos and many others flock to for winter, and off-season fun; the town of 8,000 residents is filing for Chapter 9 bankruptcy protection against a $43 million legal judgment.
Mammoth Lakes is now "the second California municipality in a week to seek court protection from creditors," notes Bloomberg.
The town asserts that bankruptcy is "the only option" they are left with, according to the Mammoth Lakes official website. The move was approved by a special vote of the town council Monday. The option to file bankruptcy arose "after [the town's] largest creditor, Mammoth Lakes Land Acquisition (MLLA) repeatedly refused to mediate its $43 million judgment against the Town, and obtained a State court order requiring payment of the full judgment by June 30, 2012."
Mammoth Lakes breaks down their financial struggles into two core issues:
One - a lack of sufficient revenue to pay its current and anticipated obligations, as evidenced by a $2.7 million initial shortfall in its 2011-2012 fiscal year budget, balanced through painful measures in June 2011, an additional unanticipated shortfall of $0.9 million in the same 2011-2012 fiscal year that forced the Town to reduce its already low available cash, and a projected $2.8 million budget shortfall in its 2012-2013 fiscal year. Two - a Writ of Mandate issued by a State Court ordering the Town pay a $43 million judgment owed to MLLA by June 30, 2012.