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.

Thursday, April 11th, 2019

Tim Eyman stuck in Chapter 11 for now as Judge Barreca orders him to file a budget

Dis­graced ini­tia­tive pro­mot­er and ser­i­al law­break­er Tim Eyman will remain in Chap­ter 11 bank­rupt­cy for the time being despite his desire to dis­miss the case, Unit­ed States Bank­rupt­cy Court Judge Marc Bar­reca has decid­ed.

In a hear­ing this morn­ing, Bar­reca heard argu­ments from Eyman’s attor­ney Lar­ry Fein­stein in favor of dis­miss­ing the case and from state attor­ney Susan Edi­son in favor of con­vert­ing the case to a Chap­ter 7 liq­ui­da­tion bank­rupt­cy.

But instead of grant­i­ng either motion, Bar­reca decid­ed to keep Eyman in Chap­ter 11, order­ing him to file month­ly expen­di­ture pro­jec­tions for a sev­en month peri­od no lat­er than Thurs­day, April 25th, 2019, and then, begin­ning in May of 2019, file a bud­get to actu­als com­par­a­tive analy­sis to accom­pa­ny his month­ly reports.

Judge Bar­reca’s order set­ting bud­get and report­ing require­ments

“You may not have been ever able to be forced into an invol­un­tary bank­rupt­cy… I mean, the path for that is much more dif­fi­cult and has a num­ber of deter­mi­na­tions involved with it,” Judge Bar­reca not­ed in remarks from the bench direct­ed to Tim Eyman and his bank­rupt­cy attor­neys from Vort­man & Fein­stein.

“But once you vol­un­tar­i­ly filed [for] bank­rupt­cy, the mere fact that the bank­rupt­cy isn’t real­ly doing what you hoped it would do for the debtor isn’t of itself grounds for back­ing out of it,” the judge explained to Eyman’s camp.

While Bar­reca denied Eyman the exit from bank­rupt­cy he and his attor­neys had sought, Eyman did avoid — for now — the con­ver­sion of his case into a Chap­ter 7, which is com­mon­ly known as a liq­ui­da­tion bank­rupt­cy.

“The State has not met its bur­den of show­ing that there’s been such exces­sive mis­man­age­ment by the debtor or sub­stan­tial or con­tin­u­ing loss to the estate that con­ver­sion is war­rant­ed,” Bar­reca declared in sub­se­quent com­ments.

“I will there­fore deny the [State’s] motion to con­vert, but with­out prej­u­dice to a motion based on debtor’s future con­duct in the case.”

“How­ev­er, to avoid future mis­use of funds and to allow the par­ties to assess the rea­son­able­ness of expen­di­tures, I will require the debtor to file month­ly bud­get pro­jec­tions and to report against those pro­jec­tions.”

Bar­reca went on to explain that Tim Eyman does­n’t have to guess what his income from gifts and dona­tions from his friends might be, but he does need to esti­mate what his month­ly expens­es will be as part of that bud­get. As men­tioned, it must cov­er a peri­od of approx­i­mate­ly six months, span­ning the lat­ter half of 2019.

Despite deny­ing the State’s motion to con­vert, Bar­reca expressed uneasi­ness with Eyman’s month­ly cash burn rate, which was in excess of $14,000 a month between the end of Novem­ber 2018 and the end of Feb­ru­ary 2019.

“I am con­cerned that Mr. Eyman does not under­stand that his spend­ing habits require restraint dur­ing the pen­den­cy of the case,” Bar­reca said.

The judge then offered an aside: “Regard­less of how much influ­ence he [Tim] has, if com­mu­ni­ty prop­er­ty — which is prop­er­ty of the estate — is being expend­ed, that would mean that oth­er fam­i­ly mem­bers that are spend­ing com­mu­ni­ty prop­er­ty need to exer­cise restraint dur­ing the pen­den­cy of the case as well.”

Bar­reca’s deci­sion means that Eyman’s bank­rupt­cy will con­tin­ue for the indef­i­nite future. Eyman is cur­rent­ly fight­ing legal bat­tles on three sep­a­rate fronts:

  • He is con­test­ing a charge of mis­de­meanor theft by the City of Lacey after he was caught on video steal­ing a chair from Office Depot;
  • He is a defen­dant in mul­ti­ple actions pend­ing in Thurston Coun­ty Supe­ri­or Court due to his cam­paign finance vio­la­tions;
  • And his estate is now under the juris­dic­tion of the Unit­ed States Bank­rupt­cy Court for West­ern Wash­ing­ton due to his deci­sion to file for Chap­ter 11.

To our knowl­edge, Eyman has not com­ment­ed on today’s devel­op­ments in U.S. Bank­rupt­cy Court. He has instead been ask­ing his fol­low­ers to con­tact Sec­re­tary of State Kim Wyman to com­plain after Wyman’s office indi­cat­ed it would not accept sig­na­tures for Ref­er­en­dum 80, Eyman’s lat­est scheme, which is an attempt to void pay increas­es for Wash­ing­ton’s elect­ed offi­cials approved by a cit­i­zens’ com­mis­sion.

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