First Stockton, Now Mammoth Lakes
On March 11, 2012, we blogged about Stockton’s fiscal plight and effort to take advantage of a new California law, AB 506, to mediate with its creditors. The law positions bankruptcy as a last resort, after the municipality has exhausted other means for working out it financial problems.
As reported online on April 6, 2012 by the Associated Press on SFGate, Mammoth Lakes may be next to mediate with its creditors. Unlike Stockton, battered by the housing crisis, general economic problems, and a growing budgetary shortfall, Mammoth Lakes got whacked by a $42M judgment (including interest and legal fees),resulting from an unsuccessful lawsuit with a developer. On top of that disaster, there has been a poor snow season. Though the causes of Mammoth Lakes’ economic plight are different than those of Stockton’s, both cities are on the verge of bankruptcy.
Above: Legal avalanche.
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