The 2012 bankruptcy
To the edge and then back again
Practically everyone calls it “The Bankruptcy,” even though Mammoth never actually crossed that line.
The town came close enough, though, and it seemed at times as if the eyes of the nation—and certainly California—were focused on Mammoth in the same way television crews and bystanders wait nearby to see the precise moment when the house slides off the cliff.
The town decided to file for municipal bankruptcy protection on Monday morning, July 2. The Town Council took the action unanimously.
“I wish this hadn’t happened,” said Mayor Matthew Lehman that day, “but it’s not the way the cards fell for us.”
The town immediately issued a press release regarding the Town Council decision.
“Bankruptcy, unfortunately, is the only option that the town is left with, after its largest creditor, Mammoth Lakes Land Acquisition (MLLA) repeatedly refused to mediate its $43 million judgment against the town, and obtained a state court order requiring payment of the full judgment by June 30.”
In many ways the move was somewhat anticlimactic, said Councilmember and Mayor Pro Tem Rick Wood.
“We had no option,” he said, “and I think it could be universally stated by every body here that we don’t feel good about it. But it was a necessary and unavoidable step under the circumstances.
“In some ways, I don’t want to say it’s anticlimactic, but this has been brewing over some time. We sure tried to avoid it, but here we are.”
It didn’t last long.
Federal Bankruptcy Judge Elizabeth Perris, mediating the case from her home base in Oregon, effectively stopped the bankruptcy proceedings on Aug. 21 when she brought about a settlement of $29.5 million over 23 years, with an interest rate set at 5.17 annually.
Characterized by Assistant Town Manager Marianna Marysheva-Martinez as “a talented and trustworthy mediator,” Perris guided the two sides into a deal that ultimately led to a town restructuring and caused plenty of controversy, particularly in regards to a cutback in police and a proposed closure of the Whitmore Pool and Park.
As it turned out, the police enter 2013 stuck with the cutback, although the Town Council figured out a way to keep the pool open. In the latest chapter, the town’s credit rating, set by Standard & Poor’s, improved dramatically.