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Seven weeks after the Town of Mammoth Lakes filed for bankruptcy protection, the Town and its major creditor, Mammoth Lakes Land Acquisition, have reached a tentative agreement to settle the $43 million court judgment.

For more than a year, officials from the Town and MLLA have talked, then quit talking and finally were ordered to mediate by a US Bankruptcy Court judge. Assistant Town Manager Marianna Marysheva-Martinez emailed the news of settlement to media and a long list of interested people just after 7pm Tuesday night. Martinez said that “The Town will not be able to provide further comment regarding the settlement” beyond information in the press release.

That release says that the Town and MLLA have reached a “tentative agreement on a settlement of the $43 million court judgment held by MLLA against the Town.” The release says Terrence Ballas is also a party to the settlement. He is the developer holding commercial development rights under the Town’s 1997 Airport Development Agreement and associated leases. The press release says the settlement will address all development agreement contract breaches which were the subject of the original lawsuit that led to a $30 million judgment that expanded to $43 million over several years.

The Town and MLLA have talked about a settlement, guided by US Bankruptcy Judge Elizabeth Perris, since August 6th. The press release says the two sides reached an agreement on the amount and terms and “signed a term sheet containing the settlement’s key points. The settlement agreement,” says the release, “including any and all terms, will remain confidential until it is fully documented and executed.”

During the process of documenting and approving the settlement, all discovery and litigation among the parties will be put on hold. Some key bankruptcy court deadlines will remain including a deadline to file objections to the Town’s eligibility for bankruptcy protection by entities not party to the settlement.

Officials say the Town will provide additional information to the public as soon as the settlement documentation is finalized and filed for court approval. This is expected, officials say, within weeks. Then the Town will hold public meetings to discuss how to finance the settlement.

We have emailed a question to Assistant Town Manager Martinez about whether the Town will still pursue bankruptcy protection. We await her response.

TOWN AND MLLA ANNOUNCE SETTLEMENT (Press Release)

Mammoth Lakes, California, August 21, 2012 — The Town of Mammoth Lakes and Mammoth Lakes Land Acquisition LLC (MLLA) jointly announced today that, as a result of a U.S. bankruptcy court-established mediation, they have reached a tentative agreement on a settlement of the $43 million court judgment held by MLLA against the Town. Also a party to the settlement is Terrence Ballas, the developer holding commercial development rights under the Town’s 1997 Airport Development Agreement and associated leases. The Airport commercial development has been put on hold since legal issues with MLLA emerged over the hotel/residential portion, and the Developer has since asserted various contract breaches by the Town, which the settlement will address.

The parties, guided by U.S. Bankruptcy Judge Elizabeth Perris, a talented and trustworthy mediator, have worked diligently since August 6, 2012, to reach an agreement on the amount and terms, and signed a term sheet containing the settlement’s key points. The settlement agreement, including any and all terms, will remain confidential until it is fully documented and executed.

While steps are taken to document and seek approval of the settlement, all discovery and litigation among the parties will be put on hold. 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.

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. At that time, public meetings will commence to discuss how to finance the settlement.

The Town, MLLA and Terrence Ballas sincerely thank U.S. Bankruptcy Judge Elizabeth Perris, who served as the mediator and tirelessly worked with the parties around the clock to reach the settlement.

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