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Mammoth Lakes, California files for bankruptcy

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SAN FRANCISCO | Tue Jul 3, 2012 7:04pm EDT

SAN FRANCISCO (Reuters) - Mammoth Lakes, California filed on Tuesday for Chapter 9 bankruptcy protection from its creditors due to a nearly $43 million legal judgment against it.

The filing follows a vote Monday by Mammoth Lake's town council in favor of a bankruptcy filing, specifically to seek protection from the property developer awarded the judgment against the resort town of about 8,000 residents in the Sierra Nevada mountains.

The developer, Mammoth Lakes Land Acquisition, is the town's largest creditor, according to documents filed in U.S. Bankruptcy Court, Eastern District of California (Case 12-32463).

The company will contest the town's eligibility for Chapter 9 protection, said Dan Brockett, a lawyer for the company.

The company and Mammoth Lakes have been in a legal fight that began in 2006 over a property development dispute.

Stockton, a city of nearly 300,000 people in California's Central Valley, filed for bankruptcy protection last week, becoming the most populous U.S. city to seek protection from its creditors.

The Sacramento court in which Mammoth Lakes filed for bankruptcy protection is due on Friday to hear Stockton's Chapter 9 case.

(Reporting by Jim Christie; Editing by Padraic Cassidy and Cynthia Osterman)
U.S.
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Comments (6)
neahkahnie wrote:
The snowball has started it’s roll down the hill. It will get bigger and bigger and move faster and faster as it rolls.

Jul 03, 2012 7:08pm EDT  --  Report as abuse
Dragos111 wrote:
Our Federal Government is flat broke. The states are all broke. Every city, town and village is broke. The taxpayers are all in debt up to their eyeballs. Raising taxes is no longer an option.

As smaller towns and cities begin declaring bankruptcy, the rest of America should wake up and learn. It is time to get a handle on the spending side of the equation.

Cant wait for November when we get to push more tax and spend politicians out of DC. Obama is the obvious choice, but even Republicans who fail to go conservative are going to get the boot. Dick Lugar is a good example.

Jul 03, 2012 7:42pm EDT  --  Report as abuse
mulholland wrote:
They aren’t bankrupt. Pony up $5400 each.

Jul 03, 2012 8:25pm EDT  --  Report as abuse
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