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Argentina city facing bankruptcy due to school raffle
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A 1995 school raffle is coming back to haunt a small city in Argentina, which faces bankruptcy if it has to pay a settlement that's the equivalent of US$6.6 million.
The 100 million peso payment ordered by the country's high court would eat up 30 percent of the municipal budget of Chascomus, Mayor Javier Gaston said Tuesday.
With 80 percent of the budget going to salaries, "we would have to suspend virtually all services," he said.
The city of 33,000 people is located in an agricultural area 130 kilometers (about 80 miles) south of Buenos Aires.
The case dates back to 1995, when then-mayor Juan Carlos Salas authorized a local school cooperative to hold a raffle for 324 hectares (800 acres) of land, valued at US$15,000 dollars.
But the raffle organizers sold 2,000 tickets instead of the planned 1,000, and never checked if the land had a clear deed.
As it turned out, the raffle organizer took out a mortgage on the plot shortly before the drawing.
Two women from a neighboring town -- one of whom has since died -- won the prize and enjoyed the land for two years before it was seized by creditors.
Years later, it was auctioned off for US$326,000 dollars.
The US$6.6 million judgment, following a lawsuit that went all the way to the Supreme Court, is explained by Argentina's hyper-inflation -- some 700 percent over the past decades -- and other factors which have caused the value of the land to balloon.
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