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Town anticipates loss in Hot Creek suit

October 25, 2010

The Mammoth Town Council is now officially girding for a loss in the $30 million ongoing “Hot Creek” airport litigation.

Based on the comments and questions made at a Sacramento hearing by a panel of judges, the Town Council concluded Wednesday that there is a significant risk that the trial court verdict will be upheld. A decision is expected within 90 days.

In preparation for a potential negative ruling, the Council is exploring options, town officials said in a press release Thursday afternoon.
Among them are:

• The filing of a Petition for Review with the California Supreme Court

• Challenging the denial of the Town’s insurance coverage, and seeking legal advice on municipal bankruptcy options.

• Special municipal bankruptcy laws have been enacted to assure continuity of service to the public in the face of severe financial challenges.

This litigation arose when the Hot Creek developer claimed that the Town interfered with its rights under a development agreement to build a 250-room condominium hotel at the Mammoth Yosemite Airport, and allegations that the town must be held responsible for the FAA’s interference with the project.

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