SAN FRANCISCO (Reuters) - Mammoth Lakes, California, will file later on Tuesday for Chapter 9 bankruptcy protection from its creditors in U.S. Bankruptcy Court for the Eastern District of California, according to its assistant town manager.
Mammoth Lake's town council voted on July 2 in favor of the bankruptcy, specifically to seek protection from a property developer that has a $43 million legal judgment against the resort town of about 8,000 residents in the Sierra Nevada mountains.
Mammoth Lakes Land Acquisition will contest the town's eligibility for Chapter 9 protection, said Dan Brockett, a lawyer for the company.
The company and town have been in a legal fight that began in 2006 over a property development dispute.
Stockton, a city of nearly 300,000 people in California's Central Valley, filed for bankruptcy protection last week, becoming the most populous U.S. city to seek protection from its creditors.
The Sacramento court in which Mammoth Lakes is filing for bankruptcy protection is due on Friday to hear Stockton, California's Chapter 9 case.
(Reporting by Jim Christie; Editing by Padraic Cassidy)