Mammoth Lakes' Possible Filing Tests AB 506
Considerable anxiety about the condition of local finances exists because revenues continue to stagnate, weighed down by the on-going malaise in real estate markets, especially in housing.
Moreover, there has been a recent trickle of Chapter 9 filings – the section in the U.S. Bankruptcy Code that applies to local government filings.
It is not yet evident how much these individual cases represent isolated, localized actions or how important they are as harbingers of an ominous national trend. Regardless, the media has directed a lot of attention on every instance of serious prospects for a bankruptcy proceeding. This has caught the public’s attention, especially now that the tony ski resort town, Mammoth Lakes, indicated it’s considering bankruptcy and the California legislature passed a new law, AB 506, to help public agencies sidestep bankruptcy.
Suddenly, people are asking once again, could our city file bankruptcy and is AB 506 the right tool to avoid it?
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