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.
PHOTOS: California cities in bankrupcy
A breakdown in negotiations with the developer was the last straw.
READ MORE: http://latimesblogs.latimes.com/lanow/2012/07/mammoth-lakes-bankruptcy.html
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