The Town of Mammoth Lakes on Tuesday reached a settlement agreement with Mammoth Lakes Land Acquisition over the town’s $43 million judgment, according to Assistant Town Manager Marianna Marysheva-Martinez.
Both sides made the announcement jointly.
The terms of the agreement remain vague but clearly a bridge has been crossed, said longtime Town Councilmember Rick Wood, an attorney.
“I’m pleased the parties have come to terms,” he said in an interview, “and I’m looking forward to moving forward. This provides a nearly unique opportunity to re-focus and direct our energy toward improving the quality of our lives and help us to be economically sustainable.”
Marysheva-Martinez said the terms of the agreement would remain under wraps until all the parties associated with the Town’s fiscal situation are resolved. There are, Wood said, dozens – perhaps hundreds – of creditors whose cases against the Town remain unresolved. There remain, he said, many details in the final settlement overall, and that is why Mammoth remains floating in the current of bankruptcy proceedings.
Mayor Matthew Lehman did not turn cartwheels over the settlement.
“Without getting into details, there are pros and cons for both sides,” he said. “But, overall, I think we’re moving in the right direction. I am cautiously optimistic.”
Both Wood and Lehman emphasized that the settlement is, technically, an “agreement to agree” and that it is not set in stone quite yet.
The main thrust, however, is that the long legal saga with MLLA, which began in 1997, is over.
If things go according to plan, Mammoth will not be bankrupt.
“The parties, guided by U.S. Bankruptcy Judge Elizabeth Perris, a talented and trustworthy mediator, have worked diligently since Aug. 6 to reach an agreement on the amount and terms, and signed a term sheet containing the settlement’s key points,” Marysheva-Martinez said.
“The settlement agreement, including any and all terms, will remain confidential until it is fully documented and executed.”
She said in the press release details of what the Town actually has to pay, and on what schedule, depends on how the Town intends to finance the payment.
Town Manager Dave Wilbrecht, speaking last July 4, said one possibility is that the town would turn to the bond market to come up with the money, then negotiate with the bond holder the terms of the payments.
In the press release issued Tuesday evening, Marysheva-Martinez also sounded a note of caution.
“The Town will provide additional information to the public as soon as the settlement documentation is finalized and filed for court approval, which is expected within weeks,” Marysheva-Martinez said.
“At that time, public meetings will commence to discuss how to finance the settlement.”
“While steps are taken to document and seek approval of the settlement, all discovery and litigation among the parties will be put on hold,” she said.
“At the same time, some key deadlines established by the U.S. bankruptcy court will remain, including a deadline to file objections to the Town’s eligibility by entities not party to the settlement.”
Mammoth went to court with developer Terry Ballas in 1997 after Ballas charged the Town breached its contract with him for a condominium-hotel complex at the airport.
The Town disagreed, but lost its case in Superior Court in Bridgeport, where a jury awarded Ballas $30 million.
Having formed a new company, the Mammoth Lakes Land Acquisition, Ballas withstood a challenge by the Town in the California Appeals panel. Finally, in March 2011, the Supreme Court of California refused to hear the case.
By that time, the $30 million judgment grew to $43 million because of legal fees, and MLLA rejected the Town’s request for mediation six times.
The Town declared its intent to file for municipal bankruptcy protection on July 4.