July 2, 2012 / 11:26 PM / 5 years ago

UPDATE 1-Mammoth Lakes, Calif., approves bankruptcy filing

SAN FRANCISCO, July 2 (Reuters) - The leaders of Mammoth Lakes, California, voted on Monday to approve a bankruptcy filing for the resort town, just days after Stockton, California, became the most populous U.S. city to turn to bankruptcy court for protection from its creditors.

The vote by the Mammoth Lakes town council to seek Chapter 9 bankruptcy protection was unanimous, according to a statement on the town’s website.

The statement said bankruptcy was the only option left for the town of about 8,000 residents after its largest creditor, Mammoth Lakes Land Acquisition, refused to negotiate concessions on its $43 million judgment against the town stemming from a property development dispute.

A representative of Mammoth Lakes Land Acquisition was not immediately available for comment.

Lawyers for Stockton, a city of nearly 300,000 people in California’s Central Valley, are due to appear a Sacramento court this week. The city filed for Chapter 9 bankruptcy protection last Thursday.

Stockton is seeking court approval for its 2013 fiscal year budget. The city negotiated with creditors for three months but failed to produce enough concessions to close its budget gap by the time the deadline for the talks expired last week.

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