Case filing & court posture: The City of Cle Elum filed Chapter 9 bankruptcy on June 24, 2025 in the Eastern District of Washington (Case No. 25-01128) before Judge Whitman L. Holt. Dkt. 1 The City is a municipality serving approximately 2,200 residents with essential services including police, fire, streets, and utilities.
Liquidity crisis & catalyst: A $22.67 million arbitration judgment was awarded to City Heights Holdings, LLC in December 2024, growing to approximately $26 million with interest and fees as of the petition date. Dkt. 12 Writs of garnishment issued on May 28, 2025, forcing the City to seek bankruptcy protection. The City obtained a secured commercial credit facility from Umpqua Bank providing up to $150,000 in revolving credit at 21.99% APR.
Early case structure: The court established a claims bar date of October 31, 2025 (November 6, 2025 for governmental entities), eligibility objection deadline of September 30, 2025, and an initial plan filing deadline of December 31, 2025. Dkt. 26 Utility service adequate assurance arrangements were stipulated, including a $90,278.84 deposit with Waste Management of Washington. Dkt. 29
Plan timeline: The debtor's plan filing deadline was extended by stipulation to May 30, 2026 (as extended in December 2025). The case remains in pre-plan stage as of the latest docket activity.
Current posture: The case is in the early stages of a Chapter 9 municipal adjustment with no plan confirmation or final decree yet. Settlement negotiations were ongoing as of October 2025, with the parties engaged in dispute resolution.
