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.

“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.