Mammoth Lakes Forced To File For Bankruptcy
Mammoth Lakes, the small California town famous for its world-class skiing and snowboarding, was forced to file for bankruptcy on July 2 due to a $43-million breach-of-contract judgment brought against the town by a developer.
According to reports, the dispute arose over a 1997 agreement between Mammoth Lakes and a company called Mammoth Lakes Land Acquisition. The deal required the developer to make improvements to the Mammoth-Yosemite Airport's fixed-base operations. In exchange, the developer would be given rights to build a $400-million Hot Creek Hotel Project on 25 acres of airport land, and an option to buy the land.
In the years since, however, Mammoth Lakes has expanded its airline service significantly, and by 2007 it wanted to extend the airport's runways to accommodate Boeing 757 passenger jets. When the town discovered that the location of the hotel project might prevent it from meeting Federal Aviation Administration requirements for the runway extension, it refused to move forward until the FAA issues were worked out. That's when the developer filed its breach of contract suit.
Town officials declared in a news release that "bankruptcy is the only option that the Town is left with." The Los Angeles Times reported that the town plans to ask the court to approve a $500,000 per year payment plan, an amount it believes it can handle and still provide adequate local services.