Mammoth Lakes, California Ski Resort Town, Files for Bankruptcy

Another California town has filed for bankruptcy this week. This time it is a resort town in the High Sierra Mountains, Mammoth Lakes who filed because of a breach of contract judgment it could not afford.

The $43 million dollar judgment was awarded to a Mammoth Lakes Land Acquisition. A state court issued the judgment which is supposed to be paid in full by June 30^th, 2012.

But then city is facing a budget shortfall of $2.8 million and the judgment is three times Mammoth Lakes’ annual revenue.

In a statement, Mammoth Lakes officials said, “bankruptcy, unfortunately is the only option left.”

The city had agreed to allow Mammoth Lakes Land Acquisition to develop a $400 million hotel project on 25 acres in exchange for expanding the regional airport. But aviation regulations prevented airport expansion and the city backed out of the deal.

The town’s bankruptcy attorney will ask the court to approve a plan that will allow the city to pay judgment in $50,000 increments over the next ten years. City officials assert this all they can afford without jeopardizing the safety of their residents.

Mammoth Lakes has 7,700 permanent residents and heavily relies of tourism. The lack of sufficient snowfall has caused the city to lose a great deal of revenue.

There are a number of reasons people, businesses or city’s must file for bankruptcy, such as unemployment or decreased revenue. Lawsuits are also one of those reasons, and when a court orders an unaffordable judgment, a bankruptcy attorney an offer you solutions to your debt problems.

Chapter 11, Chapter 7 and Chapter 13 debt protection plans give the debtor the opportunity to reduce their liabilities and develop an affordable repayment plan. A bankruptcy lawyer will know which debt relief plan will be most beneficial for you.