The city of Mammoth Lakes. The ski town will declare bankruptcy after efforts to negotiate payment terms for a $43-million legal judgment broke down.
Hot on the heels of Stockton, Calif. becoming the largest U.S. city to declare bankruptcy, the far smaller hamlet of Mammoth Lakes has headed for Chapter 9, the municipal equivalent of Chapter 11. Mammoth Lakes is much smaller than Stockton — just south of 8,000 residents, versus 300,000 — but it used the same state-mandated mediation process to work things out with its creditors prior to declaring bankruptcy.
Mammoth Lakes was dealing with $2.8-million budget deficit, also much smaller than Stockton's $26-million gap, but still a gap. However, the real problem for Mammoth Lakes was a $43-million court settlement on a breach-of-contract with a developer, on a deal that dated to 1997. True, Mammoth Lakes was hit by the same housing downturn that crushed Stockton's finances, with the main difference being that Mammoth Lakes is a ski destination where second homes and condos can be appealing, while Stockton was trying to become a bedroom community for the San Francisco Bay area — a primary-home market.
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A sign is seen in a deserted section of downtown Stockton. The city will declare bankruptcy, becoming the largest U.S. city ever to do so.
The headline story is that Stockton, Calif. is now the largest U.S. city to file for bankruptcy. The Northern California municipality failed to come to terms with its creditors during a state-mandated mediation period and set in motion a filing for Chapter 9, the city-government version of Chapter 11. The total debt load has been reported as $700 million, although other sources have put it at somewhere between $500 million and a billion.
Stockton's story is being widely presented as a sad case of a city that tried to expand into being a bedroom community for the San Francisco Bay Area and got hammered by a combination of a busted housing boom and city retiree pension and health-care obligations. The loss of property tax revenue and the cost of taking care of former firefighters and cops forced the city to borrow too much money, and the debt load eventually became too great.
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'The Riot Within: My Journey From Rebellion to Redemption,' by Rodney King is displayed at EsoWon bookstore in L.A. King reportedly received a six-figure advance for the book, but he said that he only saw five.
Rodney King, whose videotaped beating at the hands of cops in 1991 led to not-guilty criminal verdict for the officers involved and touched off riots in L.A. the following year, was found dead at the bottom of his pool over the weekend. Early indications are that no foul play was involved. The 47-year-old King just drowned.
According to KPCC's Frank Stoltze, press reports had King "getting his life together." But what kind of shape were his finances in?
He received a $3.8-million civil settlement from the City of Los Angeles, but pretty much all of it has disappeared by the time his fiancée discovered him on Sunday. As the LATimes reported in April, King was: "...jobless and virtually broke. Gone is the settlement money he got after suing the city for violating his civil rights. All $3.8 million of it. Huge chunks went to the lawyers, he says, some to family members, some he simply wasted."
The Orange Country Register's parent company, Freedom Communications, has been acquired by a Massachusetts investment group. The size of the deal remains a mystery.
On Monday, Boston greeting card mini-mogul Aaron Kushner, along with a group of investors, announced the acquisition of the remaining assets of Freedom Communications, whose flagship media property is the Orange County Register.
The price remains unknown. As does the financing on the deal. And in Boston, they're even asking out loud whether this means it's game over for Kusnher's effort to buy the Boston Globe from the New York Times. His rumored bid was $200 million, which seems pretty low. The New York Times Company's former CEO, Janet Robinson, departed late last year with a $23-million severance package in tow. She didn't want to sell the Globe. But it's entirely possible that the NYT Co. now does.
The Boston Herald spoke with an academic and former newspaper editor to get his take:
The Los Angeles Times building. L.A. billionaire Eli Broad is once against interested in buying the struggling newspaper.
Yep, it could be Broad versus Brodsky for the future of the L.A. Times, which is currently embroiled in the never-ending Tribune Co. bankruptcy. The L.A. billionaire philanthropist against the bankruptcy lawyer turned hedge-fund CEO.
Brodsky's Aurelius Capital Management, based in New York, is fighting hard for its piece of Tribune's liabilities, basically forcing the company's senior creditors, including Oaktree Capital Management, to delay their hopes that they could get the viable parts of the media giant out of Chapter 11, leaving the junior creditors to tussle over the scraps. But Brodsky doesn't play that game, and he's no stranger to pressing his case and pressing it hard.
This can create some controversy. During the bankruptcy of what was left of Washington Mutual after the FDIC sold its banking business to JP Morgan Chase in 2008, Aurelius was accused by a single shareholder of insider trading because the hedge fund, along with three others, wouldn't back a reorganization plan. However, the bankruptcy judge eventually decided to "vacate" a ruling that would have enabled the shareholders to sue the hedge funds, effectively erasing the accusation from the legal record.