Mammoth settles suit with developer; bankruptcy a done deal
By Steven Church, Bloomberg
Mammoth Lakes won dismissal of its bankruptcy case after settling the $43 million development lawsuit that forced the city to seek court protection from its creditors.
U.S. Bankruptcy Judge Thomas Holman in Sacramento this month signed an order ending the case about four months after the town became the second of three in California to file bankruptcy this year.
Community leaders put the town into bankruptcy in July after being ordered by a state court to pay $43 million to its biggest creditor, Mammoth Lakes Land Acquisition. The town announced a settlement with the company the following month, and in September it asked Holman to dismiss the case.
The settlement allows Mammoth Lakes “to resolve numerous significant creditor issues and will provide for the town’s prompt exit from bankruptcy,” the city said in court papers filed in September.
Details of the accord weren’t filed in the bankruptcy case. Ending it voluntarily allows the city to avoid paying lawyers and financial advisers to develop and win court approval of a plan to adjust its debts.
Mammoth Lakes, a ski resort community of 8,200, has an annual budget of $19 million. It entered bankruptcy saying it couldn’t afford to pay the developer.
The company sued the town in 2006 and accused it of breaching a development agreement allowing the company to build homes, retail space, hangars and other structural improvements near the Mammoth Yosemite Airport. Terrence Ballas, who holds the development rights at issue in the lawsuit, is part of the settlement, the city said.
Good. The town of Mammoth Lakes got what they deserved – one big fat bill that will hang over their heads for years to come.
It should be a lesson to other municipalities that push private enterprise around – no government is above the law!
The lesson actually is to read – and understand – your contracts before you sign them. A lesson the City of South Lake Tahoe could benefit from as well.
I wonder if Mammoth has anything left to fight off LADWP’s water encroachment as well?
As long as they have that mountain,ther will be people there.
Great place to crave turns,just take your own wine,it’s expensive ther for good vintage.
Suggest staying at Twin lakes cabins RIGHT WHERE LAKE MARY SPILLS INTO,rated 5 stars for peace of mind “TOUCHING THE TRUE HEAVENS”.