(LATIMES) — The High Sierra town of Mammoth Lakes said Monday that it filed for bankruptcy because it cannot afford to pay a $43-million breach-of-contract judgment against it brought by a developer.
In a prepared statement, Mammoth Lakes officials said "bankruptcy, unfortunately, is the only option left" for the town, whose largest creditor, Mammoth Lakes Land Acquisition, had won a state court order requiring full payment by June 30, 2012.
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Facing a judgment nearly three times the size of its annual operating budget and a $2.8-million shortfall in its 2011-12 fiscal year, the town had already cut many services and asked employees to take reductions in pay. Compounding problems, the adjacent Mammoth Mountain ski resort was forced to lay off 70 full-time employees last year due to a dearth of snow.