According to Town of Mammoth officials, on February 2nd Mammoth Lakes Land Acquisition filed a petition with the State Court to demand payment of the full $42 million legal judgment against Mammoth, after 10 months of negotiations. Town officials revealed this startling turn of events after MLLA went to local media on Tuesday to accuse Mammoth of bad faith negotiating.
Jay Becker of MLLA emailed a letter to Sierra Wave and other local media which said that the Town had ceased settlement efforts and refused to respond to a December 14 proposal from MLLA. The letter said the Town’s conduct “smacks of bad faith.” Mammoth Town Councilman Rick Wood called it “posturing” by MLLA.
A press release issued by the Town late Tuesday afternoon said that on December 1st the Town had made a multi-million settlement offer to MLLA. Then, the Town says, in light of “worsened fiscal conditions” Town officials decided they could not pay that December 1 offer. They didn’t tell that to MLLA until January 19th. Meanwhile, on December 14th, MLLA proposed an even larger payment amount. And, on February 1st a standstill agreement between the two sides expired. That agreement had prevented MLLA’s collection of the millions from Mammoth.
Mammoth officials said they wrote to MLLA on January 19th to say that in light of “current fiscal realities” the Town has to re-examine its finances, including the settlement with MLLA. The press release says that the Town has begun the development of a “global restructuring plan” to address fiscal issues impacting the Town. But the Town’s press release said they told MLLA they would present another settlement offer after February 1st. The Town Council is still meeting in closed sessions over that offer. In fact, another closed session was scheduled for Wednesday morning.
In its press release, the Town blames MLLA for an abrupt halt to settlement talks and MLLA blames the Town for the same thing. Mammoth officials said MLLA filed with the court and did not give Mammoth advance notice. The press releases says, “Sadly but clearly, MLLA is the one acting in bad faith.”
Even after all of this, the Town says it will submit another offer to MLLA in the near future. The press release never does explain the “worsened financial conditions” that led to this tangle of misunderstanding. (See entire Town press release below.)
PRESS RELEASE Town of Mammoth Lakes Responds to Mis-Information by MLLA
Town of Mammoth Lakes, California – February 07, 2012 — Since April 2011, the Town of Mammoth Lakes has been negotiating with Mammoth Lakes Land Acquisition (MLLA) in an attempt to reach a settlement of the judgment MLLA obtained against the Town, arising out of the Hot Creek development project. As part of those negotiations, the Town has made full, complete and ongoing disclosures of all of its financial and operational information to MLLA. Frequent closed session discussions have taken place among Town Council members and staff to develop and present to MLLA payment proposals that the Town could afford, keeping in mind its obligation to provide essential municipal services to the community and visitors.
On December 1, 2011, the Town made a multi-million settlement offer to MLLA – an amount that the Town currently feels it cannot afford to pay, in light of the worsened fiscal conditions since early December. On December 14, 2011, MLLA requested an even larger payment.
On January 19, 2012, the Town withdrew its December 1 offer, writing to MLLA: “In light of current fiscal realities, the Town has determined that it needs to more closely analyze and assess pertinent issues with financial implications, including the ongoing efforts to reach a resolution with MLLA. The Town has begun the development of a global restructuring plan, which will address the various fiscal issues impacting the Town.” The Town’s January 19th letter further stated that another settlement offer would be presented to MLLA after February 1, 2012. Since then, the Town has continued to work on a sustainable plan to both pay MLLA and satisfy its other fiscal obligations. Frequent closed session discussions continued.
In the meantime, it is MLLA that decided to abruptly stop settlement discussions with the Town. To the Town’s surprise and dismay, MLLA filed a petition with the State Court on February 2, 2012 (and served the Town on February 6) to demand payment of the full $42 million legal judgment. MLLA then went to the local media and accused the Town of bad faith negotiations. All of this was done without an advance notice to the Town, or any indication that MLLA was about to cease the settlement process. Sadly but clearly, MLLA is the one acting in bad faith.
The Town will, after careful consideration of its obligations to the citizens, businesses and taxpayers of the Town, submit to MLLA in the near future another settlement proposal that the Town can afford consistent with its stewardship of the public’s funds.