While the Town of Mammoth prepared to file for bankruptcy protection, a Mammoth Lakes Land Acquisition attorney made it clear that MLLA will fight that bankruptcy, doesn’t think Mammoth is eligible for bankruptcy, and maintains that Town officials have refused to accept the responsibility to pay their debt.
Dan Brockett has handled the MLLA lawsuit from the beginning. He said of Mammoth, “We don’t think they are eligible for bankruptcy. They didn’t negotiate in good faith, and they are not insolvent.” Brockett pointed to MLLA’s offer in March for the Town to pay its debt at around $2.7 million per year over 30 years, with payment adjustments according to the snow year.
Brockett said, “We made other offers they never responded to. No one on the Town Council wants to take responsibility. We’ve been trying to get them to since 2006,” said the attorney. He added that Town officials think that “some judge in a black robe is going to bail them out when the courts have been nothing but critical of the Town’s behavior.”
Bottom line for MLLA – Mammoth is not entitled to file for bankruptcy unless they’re insolvent, and they’re not insolvent. Brockett went on to say that MLLA’s March proposal was “affordable.” He said, “They’re going to maneuver and cook their books to show they’re poor.”
When asked to respond to the fact that the Town of Mammoth has dealt with budget deficits, including this year’s nearly $3 million dollar shortfall, Brockett said it was a bad snow year. “We’re not asking them to pay it all in one bad year or even ten years. We’re talking about 30 years. We’ll work with them.” Brockett said MLLA gave Mammoth a workable offer and “They never responded. Who’s in bad faith?” he said.
Town of Mammoth lawyers and officials have said that in fact MLLA has refused to mediate and work with the Town toward a settlement. Attorney Zack Clement, representing Mammoth, said at Monday’s Town Council meeting that he and others asked MLLA to participate in mediation at least six times.
Brockett points to what MLLA maintains is bad faith dealing on the part of the Town. He said Mammoth made MLLA an offer six months ago of about $20 million over a period of 10 or 15 years and then three weeks later rescinded the offer. He said the Town’s offer was something like $3 million up front and $17 million over time.
The MLLA attorney said another issue is whether Mammoth can issue bonds, raise taxes or fees to pay their big debt. He brought up a possible ski lift tax.
What about the fact that MLLA steadfastly refused to go to Mammoth’s 60-day mediation? Brockett said, “We haven’t gone to mediation because we knew it would go nowhere considering the history.” Brockett added that MLLA would have gone to mediation if Mammoth had responded to their offer in March and provided additional financial information. He says the Town would do neither.
When asked to respond to community pain over the $43 million debt, Brockett said, “We tried to settle with them before the trial. They made a calculated risk. I feel badly for the Town,” he said. Brockett declined to say how much the settlement might have been back then in 2006. Is it all unfair? Brockett said a jury of Mono County citizens were the ones who handed down a $30 million judgment that has now grown through interest and attorneys’ fees to $43 million.
We spoke to Brockett at a late hour yesterday and contacted Town officials for comment on MLLA’s position. We hope to hear from them today.