In a two-hour closed session Wednesday night, members of the Mammoth Town Council heard disturbing news from their lawyers on the Hot Creek lawsuit appeal. The attorneys from the firm of Morrison and Forrester concluded that the judges’ questions and comments indicated a significant risk that the appeal would be lost, according to Councilman Rick Wood.
The Council issued a press release Thursday that said they will look into the filing of a petition for review with the California Supreme Court, challenging the denial of the Town’s insurance coverage of the $30 million damages award, and seeking legal advice on municipal bankruptcy options.
The Council said that “Special municipal bankruptcy laws have been enacted to assure continuity of service to the public in the face of severe financial challenges.”
The press release further states that the lawsuit came up when Hot Creek developers claimed that the Town interfered with its rights under a development agreement with the Town to build a 250 room condo hotel at the Mammoth Yosemite Airport and that the Town must be held responsible for the FAA interference with the project.
Two of the attorneys representing Mammoth spoke to the Council electronically in a closed session Wednesday night. Town Manager Rob Clark, who attended the Monday hearing in Sacramento, said that comments made by the judges questioned the Town’s motives and suggested Mammoth was just “trying to get rid of the contract with Hot Creek by using FAA rules.” Clark said the Town’s attorneys basically said to “brace yourselves.”