Tim Eyman listens uncomfortably during a confrontation with his opponents
Tim Eyman listens uncomfortably during a confrontation with his opponents (Photo: Andrew Villeneuve/NPI)

Tim Eyman’s near­ly four-year old bank­rupt­cy could soon be over.

A grand set­tle­ment backed by the estate’s court-appoint­ed trustee and agreed to by all the par­ties involved in the right wing activist’s Chap­ter 7 case has been sub­mit­ted to Bank­rupt­cy Court Judge Marc Bar­reca for final approval next month, records recent­ly filed with the court and exam­ined by NPI show.

“To avoid the addi­tion­al time, costs, and expens­es of lit­i­ga­tion, the Par­ties engaged in medi­a­tion,” a plead­ing filed by the trustee’s attor­neys explains.

“The Par­ties now wish to set­tle all of the remain­ing claims relat­ed to the Adver­sary Pro­ceed­ing and cer­tain oth­er issues in the Bank­rupt­cy. […] In the Trustee’s opin­ion, the relief sought should be grant­ed in its entire­ty to give effect to the nego­ti­at­ed Set­tle­ment, which is in the best inter­est of creditors.”

Eyman’s bank­rupt­cy began in Novem­ber 2018 as a maneu­ver to avoid the State of Wash­ing­ton’s main cam­paign finance enforce­ment law­suit against him. After the state won a com­fort order allow­ing it to pro­ceed in spite of the bank­rupt­cy, Eyman moved to dis­miss his Chap­ter 11 peti­tion. But Judge Bar­reca said no.

Eyman’s case got con­vert­ed to a Chap­ter 7 liq­ui­da­tion bank­rupt­cy last year after Eyman stopped mak­ing the month­ly pay­ments to the peo­ple of the State of Wash­ing­ton that he had agreed to make, putting him in default. NPI broke the sto­ry about Eyman’s default here on the Cas­ca­dia Advo­cate.

A trustee was sub­se­quent­ly appoint­ed to over­see Eyman’s estate.

The pri­ma­ry item owned by the estate is a home — or, in legal par­lance, real prop­er­ty — in the Har­bour Pointe neigh­bor­hood of Mukilteo.

Under the terms of the set­tle­ment, the broth­er of Tim Eyman’s for­mer spouse Karen will pro­vide the funds to pur­chase that fam­i­ly home, lib­er­at­ing it from the defunct Eyman mar­i­tal com­mu­ni­ty. The arrange­ment will allow Karen (who is now going by her pre­vi­ous sur­name of Williams, accord­ing to the pro­posed set­tle­ment) to remain in the home and become its sole owner.

The agree­ment stip­u­lates that the Williams fam­i­ly shall pay $906,484 to pur­chase the house and its fix­tures and from the estate, which is now under the super­vi­sion of trustee Vir­ginia Bur­dette. After the sale clos­es, Bur­dette will have a sig­nif­i­cant sum of mon­ey avail­able with which to sat­is­fy Eyman’s debts.

The total cur­rent val­ue of the home is esti­mat­ed by Zil­low to be $1,524,400.

“The agreed cash pay­ment by Karen Williams to pur­chase the Muk­il­teo house rep­re­sents the most effi­cient and least cost­ly means to liq­ui­date the prop­er­ty,” Bur­det­te’s attor­neys told Judge Bar­reca. “Though the Muk­il­teo house is prop­er­ty of the Estate, the Trustee rec­og­nizes that if Karen Williams were found to have an sep­a­rate prop­er­ty inter­est what­so­ev­er, the Trustee’s abil­i­ty to prompt­ly mar­ket the prop­er­ty for sale to an arms-length buy­er could be sig­nif­i­cant­ly ham­pered, and would require addi­tion­al lit­i­ga­tion to sell co-owned property.”

Eyman’s pri­ma­ry cred­i­tor is the peo­ple of the State of Wash­ing­ton, who he owes mil­lions of dol­lars to for fla­grant and obscene vio­la­tions of the state’s pub­lic dis­clo­sure laws. His oth­er cred­i­tor is the Klinedinst Law Group, but his cur­rent attor­neys at Good­stein Law Group (in state court) and Vort­man & Fein­stein (in fed­er­al court) also want to be paid for their ser­vices. Those firms are par­tic­i­pat­ing in the set­tle­ment and its approval would bring the pro­ceed­ing to a close.

The pro­posed order sub­mit­ted to Bar­reca is described as “an order approv­ing set­tle­ment of adver­sary pro­ceed­ing, allow­ing aban­don­ment of cer­tain prop­er­ty, and autho­riz­ing sale of real prop­er­ty free and clear of liens and oth­er interests.”

The prop­er­ty to be aban­doned con­sists prin­ci­pal­ly of two cars, home fur­nish­ings, and jew­el­ry. These are things that Tim Eyman and Karen Williams used to co-own through their mar­riage, but which would be ben­e­fi­cial for the fam­i­ly to keep and would­n’t gen­er­ate a lot of mon­ey for the estate if they were to be sold. Accord­ing­ly, the trustee is ask­ing Judge Bar­reca to per­mit their abandonment.

Bar­reca will con­sid­er Trustee Bur­det­te’s motion in about one mon­th’s time, at a hear­ing sched­uled for August 10th via Zoom. Bur­dette is rep­re­sent­ed by Schweet Linde & Coul­son, PLLC, while the State is rep­re­sent­ed by Attor­ney Gen­er­al Bob Fer­gu­son’s office. Karen Williams is rep­re­sent­ed by Marc Stern and Tim Eyman is rep­re­sent­ed (in the bank­rupt­cy pro­ceed­ing) by Vort­man & Feinstein.

As long­time read­ers may recall, Eyman has used his fam­i­ly’s Muk­il­teo home in the past as col­lat­er­al for loans from U.S. Bank to finance ini­tia­tive sig­na­ture drives.

Those days are over.

Karen Williams has stat­ed in court that she was unaware of this arrange­ment, even though it was pub­licly known due to Eyman’s announce­ment of it through his email list. With the home now pass­ing into Karen Williams’ sole own­er­ship, it won’t be avail­able to Eyman as a tool with which to finance more destruc­tive schemes that would defund Wash­ing­to­ni­ans’ essen­tial pub­lic services.

That’s a good out­come for the Williams fam­i­ly and for Washingtonians.

Karen Williams has also told the fed­er­al bank­rupt­cy court in a past fil­ing that her divorce with Tim Eyman got stalled out due to Eyman’s pro­cras­ti­na­tion. Sno­homish Coun­ty Supe­ri­or Court records con­firm this. They show that Eyman ini­ti­at­ed a divorce pro­ceed­ing in May of 2019. A sec­ond case was filed by Karen Williams in March of 2022, with Eyman as the respon­dent. That divorce case has pro­ceed­ed along a par­al­lel track as this bank­rupt­cy set­tle­ment negotiation.

In a recent email mis­sive, Eyman char­ac­ter­ized Attor­ney Gen­er­al Bob Fer­gu­son’s efforts to hold him account­able for his law­break­ing as hav­ing result­ed in the loss of his home. But as Eyman knows full well, this pro­posed set­tle­ment will allow his ex, Karen Williams, to remain in the home and to own it free and clear.

The fam­i­ly is thus not los­ing the fam­i­ly home as Eyman’s mis­sive implied in a ploy for sym­pa­thy. The only thing being lost here is Eyman’s own­er­ship inter­est in the home, which he him­self put in jeop­ardy him­self as a con­se­quence of the bad choic­es that he repeat­ed­ly made. Eyman has not been a res­i­dent of the Muk­il­teo home in some time. By his own admis­sion, he moved out years ago and now lives in Belle­vue Tow­ers, in a con­do that is also owned by the Williams family.

The set­tle­ment is now in the hands of Judge Bar­reca and we’ll see next month what he decides. Our guess is that he’ll approve it. It seems to be a well nego­ti­at­ed, well con­struct­ed set­tle­ment that is fair and equitable.

About the author

Andrew Villeneuve is the founder and executive director of the Northwest Progressive Institute, as well as the founder of NPI's sibling, the Northwest Progressive Foundation. He has worked to advance progressive causes for over two decades as a strategist, speaker, author, and organizer. Andrew is also a cybersecurity expert, a veteran facilitator, a delegate to the Washington State Democratic Central Committee, and a member of the Climate Reality Leadership Corps.

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One reply on “Grand settlement agreed to by the parties in Tim Eyman’s Chapter 7 bankruptcy case”

  1. This is awe­some news — jus­tice for all to me.

    Tim still has a place to sleep, but no house for col­lat­er­al to keep our state a user fee state. Plus Tim will be help­ing pay off his finan­cial bankruptcy.

    Tim’s ex has a home. Good.

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