This is bad news. Real bad news. Mammoth Lakes, CA is in a legal dispute with a developer that dates back to 1997. Mammoth Lakes just lost a law suit to said developer and Mammoth has entered a mediation process to pay $43 million (or reach some sort of agreement with their creditor) to this developer within 90 days.
What will be the implications of this impeding bankruptcy of the city of Mammoth Lakes?
How will this bankruptcy affect Mammoth ski resort?
“But despite the appearance of prosperity, the government of Mammoth Lakes is considering bankruptcy because of its inability to pay a $43 million legal judgment in a development dispute dating back to 1997. After entering a mediation process under a new California law, the town now faces a 90-day deadline to reach an agreement with its creditors, raising doubts about the future of this longtime getaway for residents of San Francisco and Los Angeles.
Town officials say they hope that mediation will allow them to avoid filing for bankruptcy. But so far, the developer that won the lawsuit, Mammoth Lakes Land Acquisition, has refused to participate in the mediation process.” - New York Times
“In Mammoth Lakes’s case, its problems are rooted in the 1997 deal with Mammoth Lakes Land Acquisition. The town gave the developer the rights to build a hotel, residential and retail project near the local airport in exchange for making airport improvements. But the town backed out of the deal after the Federal Aviation Administration, which provided Mammoth Lakes with grants to improve the airport, objected to development nearby.
The developer sued in 2006 for breach of contract and was eventually awarded a $30 million judgment. The town exhausted its legal appeals last year, and the amount has grown to $43 million.
Meanwhile, in the past decade, other development projects here have met with mixed success. Many “condo-hotels,” in which a company manages a hotel with individually owned units, were left unsold or uncompleted. With growth plans unrealized, the town’s work force was cut to 70 from a peak of 130 about five years ago.” - New York Times
Read the full New York Time article here: