“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 in a lawsuit brought against it by a developer. ,” the L.A. Times is reporting.
“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 because of a dearth of snow.”
The rest of the article is here.
Filed under: Uncategorized
In my opinion any time a developer proposes a project required of the tax payer they should demonstrate an exact knowledge of regulations. Likewise, the city council that approves the partnership. So many times city or county leadership is sucked in with the lure of promises that can’t be kept or won’t work by developers and business mogules out to screw the tax payer. How that Mamoth Lakes is bankrupt perhaps the hope of the developer is to buy the town?
Years ago Susanville, CA got into hot water over a deal to invest in an infrastructure project for a private entity that didn’t deliver.
I’m a believer in public and private partnerships. Many of them work out but when a town is forced into bankruptcy some head should roll.