NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Friday, March 8th, 2019

So much for that bankruptcy: Tim Eyman moves for his Chapter 11 case to be dismissed

Late last year, Tim Eyman sent out an email in which he claimed that Attor­ney Gen­er­al Bob Fer­gu­son’s efforts to hold him account­able for his repeat­ed vio­la­tions of Wash­ing­ton’s pub­lic dis­clo­sure laws had left him with no choice but to file for bank­rupt­cy and divorce from his wife Karen. Said Eyman in that email:

“The amount that the gov­ern­ment, the lawyers, and oth­ers are going to take from me is the val­ue of all my assets on the day I filed for bank­rupt­cy. That includes our home, cars, fur­ni­ture, sav­ings, etc. It will be the bank­rupt­cy judge, not the AG, who will decide how much I owe. I’ll then have years under a pay­ment plan to pay that amount using future earn­ings and/or the sale of assets, like our home. It’s going to be the most dif­fi­cult finan­cial chal­lenge I’ve ever faced.”

“But again, I have no choice.”

Eyman’s woe-is-me dec­la­ra­tion instant­ly made head­lines and prompt­ed many peo­ple to con­clude that Eyman’s finances were in pre­car­i­ous shape.

But as NPI report­ed last week here on the Cas­ca­dia Advo­cate, in recent fil­ings with the U.S. Bank­rupt­cy Court for West­ern Wash­ing­ton, Eyman dis­closed hav­ing near­ly half a mil­lion dol­lars in check­ing accounts with three dif­fer­ent banks, plus addi­tion­al sums in sav­ings accounts and retire­ment accounts, per­son­al prop­er­ty val­ued at over half a mil­lion dol­lars, and a home val­ued at near­ly a mil­lion dol­lars.

Eyman’s Chap­ter 11 fil­ing is “based on the assump­tion that Attor­ney Gen­er­al Bob Ferguson’s office will be suc­cess­ful in win­ning a very large, $2.1 mil­lion judg­ment against him,” I explained in that post, adding: “That hasn’t hap­pened yet and it can’t hap­pen before Jan­u­ary of next year, when the tri­al in the main State of Wash­ing­ton v. Tim Eyman case will take place. It is pos­si­ble that Eyman and Fer­gu­son could reach a mutu­al­ly accept­able set­tle­ment agree­ment before­hand that entails Eyman pay­ing a large penal­ty, but that seems unlike­ly.”

On Feb­ru­ary 28th, less than a week after I wrote those words, Eyman and his attor­ney Lar­ry Fein­stein con­ced­ed my point in their Motion to Dis­miss:

The Debtor filed these pro­ceed­ings on Novem­ber 28, 2018 (Dkt #1). His peti­tion list­ed two cred­i­tors: one was his for­mer attor­neys, the oth­er is the State of  Wash­ing­ton. The State has assert­ed sub­stan­tial dis­put­ed unliq­ui­dat­ed claims against the Debtor aris­ing from State of Wash­ing­ton v. Tim Eyman, et al. (Thurston Coun­ty Supe­ri­or Court case no. 17–2‑01546–34) and State v. Tougher to Raise Tax­es, et al. (Thurston Coun­ty Supe­ri­or Court case no. 16–2‑03891–34).

Those cas­es are still pend­ing.

After notice and hear­ing, the Court entered a Com­fort Order on Exemp­tion from Auto­mat­ic Stay on Jan­u­ary 8, 2019 (Dkt. #38).

They are pro­ceed­ing accord­ing to their tri­al sched­ule. Those cas­es will not be brought to tri­al no ear­li­er than 2020 and maybe well after that, as there are pend­ing motions to amend the complaint(s) which will push tri­al even fur­ther into the future.

After due con­sid­er­a­tion, and because the amount and nature of any claims that might be assert­ed are years out, the Debtor wish­es for his bank­rupt­cy to be dis­missed at this time.

Until such time as the dis­put­ed unliq­ui­dat­ed claims are reduced to judg­ment, if any, the ben­e­fits of main­tain­ing the expense of a Chap­ter 11 pro­ceed­ing are out­weighed by prac­ti­cal real­i­ties. The Debtor would not be able to pro­pose a fea­si­ble plan until the total amount owed to the State of Wash­ing­ton is deter­mined and liq­ui­dat­ed.

If either par­ty appeals a deci­sion, it will be many years down the road before a final allowed claim could be dealt with and struc­tured in a bank­rupt­cy pro­ceed­ing.

Empha­sis is mine.

Tim Eyman’s motion to dis­miss bank­rupt­cy fil­ing

Eyman’s Motion to Dis­miss is a clear admis­sion that this entire pro­ceed­ing was unnec­es­sary. Tim Eyman is not bank­rupt, and he did not need to file for bank­rupt­cy. Yet he did any­way. Why? Well, per­haps Eyman was advised that fil­ing for bank­rupt­cy would be a way to stall Attor­ney Gen­er­al Fer­gu­son’s law­suit.

Nor­mal­ly, when a per­son or enti­ty files for bank­rupt­cy, it gen­er­al­ly results in an auto­mat­ic stay of all civ­il pro­ceed­ings against them. And Eyman’s Chap­ter 11 fil­ing did have the effect of paus­ing State of Wash­ing­ton v. Tim Eyman… but only for a few weeks. The State prompt­ly asked for and got a Com­fort Order from U.S. Bank­rupt­cy Judge Marc Bar­reca giv­ing it a green light to pro­ceed with its case in Thurston Coun­ty Supe­ri­or Court under the the “police and reg­u­la­to­ry pow­er” exemp­tion defined in 11 U.S. Code § 362 (Auto­mat­ic Stay).

With the com­fort order in hand in ear­ly Jan­u­ary, Fer­gu­son’s office was back in busi­ness and State of Wash­ing­ton v. Tim Eyman picked up where mat­ters had been left off. But of course the bank­rupt­cy pro­ceed­ings that Eyman had ini­ti­at­ed con­tin­ued. And as his lawyer told the court, that’s been cost­ing Eyman mon­ey:

The cur­rent bank­rupt­cy fil­ing has not slowed the legal expens­es incurred by the Debtor but has actu­al­ly increased them with the addi­tion of US Trustee fees and bank­rupt­cy counsel’s fees.

Those fees and expens­es would lessen the even­tu­al amounts avail­able for dis­tri­b­u­tion to his cred­i­tors.

The Debtor must devote his lim­it­ed resources to where it will do the most good. It is in the cred­i­tors’ best inter­est for this bank­rupt­cy to be dis­missed and the pend­ing lit­i­ga­tion resolved.

Lim­it­ed resources, ha!

No doubt Eyman is anx­ious to get this pro­ceed­ing shut down so he does­n’t have to con­tin­ue fil­ing reports detail­ing his per­son­al finan­cial posi­tion which his oppo­si­tion gets to exam­ine, along with any­one else who might be inter­est­ed.

In the mean­time, though, Eyman has con­tin­ued to cite his sham bank­rupt­cy in his fundrais­ing appeals. Emails sent by Eyman since Feb­ru­ary 28th (when he moved to dis­miss his Chap­ter 11 case) have end­ed with the fol­low­ing plea:

“I’m still strug­gling to dig myself out of all the legal expens­es, bank­rupt­cy costs, and oth­er crap that the AG’s law­suit is cost­ing me. If you’re will­ing to help, there’s three options: 1) Mail check […] 2) Pay­Pal […], 3) GoFundMe.”

If you believe what Tim Eyman says, per­haps you’d like to buy a bridge from me.

For­mer Eyman attor­ney Joel Ard claimed in a brief filed with the court that the State of Wash­ing­ton does not object to the ter­mi­na­tion of the bank­rupt­cy case. How­ev­er, the State’s response to the Motion to Dis­miss has not yet been sub­mit­ted. It isn’t due until next week. The State did pre­vi­ous­ly sub­mit an objec­tion to Ard’s appli­ca­tion for attor­ney’s fees. Ard request­ed $56,087.70 despite hav­ing backed out of rep­re­sent­ing Eyman only a short time after tak­ing him on as client.

Adjacent posts

  • Enjoyed what you just read? Make a donation


    Thank you for read­ing The Cas­ca­dia Advo­cate, the North­west Pro­gres­sive Insti­tute’s jour­nal of world, nation­al, and local pol­i­tics.

    Found­ed in March of 2004, The Cas­ca­dia Advo­cate has been help­ing peo­ple through­out the Pacif­ic North­west and beyond make sense of cur­rent events with rig­or­ous analy­sis and thought-pro­vok­ing com­men­tary for more than fif­teen years. The Cas­ca­dia Advo­cate is fund­ed by read­ers like you and trust­ed spon­sors. We don’t run ads or pub­lish con­tent in exchange for mon­ey.

    Help us keep The Cas­ca­dia Advo­cate edi­to­ri­al­ly inde­pen­dent and freely avail­able to all by becom­ing a mem­ber of the North­west Pro­gres­sive Insti­tute today. Or make a dona­tion to sus­tain our essen­tial research and advo­ca­cy jour­nal­ism.

    Your con­tri­bu­tion will allow us to con­tin­ue bring­ing you fea­tures like Last Week In Con­gress, live cov­er­age of events like Net­roots Nation or the Demo­c­ra­t­ic Nation­al Con­ven­tion, and reviews of books and doc­u­men­tary films.

    Become an NPI mem­ber Make a one-time dona­tion

3 Comments

  1. So the bank­rupt­cy was just… a ploy to get Eyman out of trou­ble in a cam­paign finance enforce­ment action?

    # by Ken Rogers :: March 12th, 2019 at 4:07 AM
  2. The Eyman saga con­tin­ues. Seems like there’s already enough mate­r­i­al for a Life­time movie…

    # by Charles Watkins :: March 12th, 2019 at 11:19 AM
  3. Tim Eyman [spelling cor­rect­ed] is an amaz­ing indi­vid­ual who shows how much one can accom­plish, with­out being elect­ed. The Sen­a­tors were quite jeal­ous in 2007 when I interned. I see that only grew. Over­all he is more of a pub­lic ser­vant than those in office in Wash­ing­ton State. The agen­da against him is incred­i­ble, pub­lic tax dol­lars being spent to cen­sor a man against the First Amend­ment right. Now, that’s where your waste is.. the attor­ney gen­er­al is mak­ing the office a joke by pur­su­ing Tim. Espe­cial­ly as his ini­tia­tives keep pass­ing and we still live in a coun­try of due process, or at least that’s what we are told.

    # by Jessica L. :: April 5th, 2019 at 10:52 PM