When Marathon Asset Management helped acquire the assets of the Pacific Lumber Co. during its bankruptcy two years ago, it wound up with a unique asset—a town of its own.
The hedge fund bought Scotia, Calif., a company town founded and owned by PALCo., which went bankrupt in 2007. That had Marathon doing some unusual things for a hedge fund, among them maintaining public spaces and handling repairs for all houses in the town of 800 about 250 miles north of San Francisco.
But that's all coming to an end. Scotia's residents (by a vote of 136-9) have decided to cut ties with Marathon. Instead of being governed by Marathon subsidiary Town of Scotia Co., the new community services district will be helmed by five board members elected Tuesday.
California's last company town will cease to be such in December. Marathon will sell the town's homes—all rented—to their tenants over the next several years, as well as upgrading its sewer system.