Town, MLLA point “bad faith” fingers at one another

On Feb. 7, the Town of Mammoth Lakes issued a press release in response to a writ of mandate filed by Mammoth Lakes Land Acquisition on Feb. 2 and issued to the Town on Feb. 6. The Town and MLLA have been negotiating since April 2011 to try to reach a settlement on the $42 million Hot Creek development judgment against the Town.

According to the press release, MLLA is accusing the Town of bad faith negotiations, which is why it filed the writ and served the Town. The Town, however, claims it is MLLA that is acting in bad faith.

The writ of mandate, according to Town Manager Dave Wilbrecht, asks the Mono County Superior Court to require the Town to pay the full $42 million. The Town is given a certain amount of time to respond. It effectively means that MLLA will not renew the standstill agreement that has been in place while negotiations have been underway. The agreement expired on Feb. 1, Wilbrecht confirmed.

MLLA’s change of heart stemmed from the Town withdrawing a counter offer it made to MLLA on Dec. 1 due to the need to study the Town budget and recalculate what the Town can actually offer, Wilbrecht said.

Wilbrecht pointed out that the Town is still putting together a counter offer to MLLA (Town Council was expected to meet again in closed session on Feb. 8), but added that the Town also continues to study Chapter 9 (bankruptcy).

“Municipalities going to Chapter 9 must go through mediation first,” Wilbrecht said of the process which goes settlement negotiations, mediation, filing for bankruptcy.

If the Town does end up filing for bankruptcy that would be a whole new process in and of itself. The Town would have to first prove it is insolvent to even be eligible, according to Wilbrecht.

Click here to read the press release. Read more on the story in this week’s print version of The Sheet.