NPI's Cascadia Advocate

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

Saturday, May 27th, 2023

With most of his estate now liquidated, Tim Eyman’s bankruptcy is finally winding down

For­mer ini­tia­tive pro­mot­er Tim Eyman may soon be out of bank­rupt­cy after near­ly five years of Chap­ter 11 and then Chap­ter 7 pro­ceed­ings, with most of his estate now liq­ui­dat­ed and the remain­ing assets that were inven­to­ried by the Unit­ed States Trustee recent­ly approved for aban­don­ment by Judge Marc Barreca.

Bar­reca’s May 19th order grant­i­ng trustee Vir­ginia Bur­det­te’s motion to aban­don the prop­er­ty of the estate (“oth­er than the funds on deposit in the estate’s bank account”) indi­cates that the case has moved into its final stages.

In Chap­ter 7, known as a “straight” bank­rupt­cy, an indi­vid­ual or busi­ness’ prop­er­ty is exam­ined, inven­to­ried, and then sold to pay cred­i­tors by a court-appoint­ed trustee. At the con­clu­sion of the process, the indi­vid­ual or busi­ness that filed for Chap­ter 7 is said to get a chance at a “fresh start,” though it’s impor­tant to note that some debts can­not be dis­charged through a bank­rupt­cy at all.

Eyman’s cred­i­tors are his attor­neys at Good­stein Law Group PLLC, his for­mer coun­sel at Klinedinst PC, the peo­ple of the State of Wash­ing­ton, and the Inter­nal Rev­enue Ser­vice (IRS). Good­stein has been rep­re­sent­ing Eyman in the main cam­paign finance enforce­ment case brought by Attor­ney Gen­er­al Bob Fer­gu­son in 2017. That case has now reached the Wash­ing­ton State Supreme Court after Eyman appealed the tri­al court’s ver­dict a sec­ond time. (Last fall, the Court of Appeals upheld most of the judg­ment, to Eyman’s great disappointment.)

Eyman, who has long been demon­stra­bly irre­spon­si­ble with mon­ey, orig­i­nal­ly filed for bank­rupt­cy in attempt to evade account­abil­i­ty in that cam­paign finance enforce­ment case, which orig­i­nat­ed from a PDC com­plaint filed by NPI mem­ber Sher­ry Bock­winkel and sup­port­ed by NPI. Fed­er­al bank­rupt­cy pro­ceed­ings nor­mal­ly take prece­dence over state lev­el cas­es, and Eyman gam­bled (prob­a­bly on a friend’s advice) that the bank­rupt­cy would shield him from Fer­gu­son’s lawsuit.

How­ev­er, in only a few weeks’ time, Attor­ney Gen­er­al Bob Fer­gu­son’s team sought and won what is known as a com­fort order, allow­ing the case to resume in par­al­lel with the bank­rupt­cy. With his gam­bit hav­ing spec­tac­u­lar­ly failed, Eyman tried to back out of the bank­rupt­cy by request­ing the case be dis­missed.

Judge Marc Bar­reca refused the request, telling Eyman: “Once you vol­un­tar­i­ly filed [for] bank­rupt­cy, the mere fact that the bank­rupt­cy isn’t real­ly doing what you hoped it would do… isn’t of itself grounds for back­ing out of it.”

Bar­reca did allow Eyman to stay in Chap­ter 11 for more than two years, rebuff­ing a request from Fer­gu­son to con­vert the case to Chap­ter 7. How­ev­er, after Eyman reneged on an agree­ment to make month­ly install­ment pay­ments to Wash­ing­ton tax­pay­ers, Bar­reca speed­i­ly approved a con­ver­sion request, appoint­ing expe­ri­enced Seat­tle attor­ney Vir­ginia Bur­dette as the trustee for Eyman’s estate.

Bur­dette wast­ed no time in get­ting to work.

Bur­dette soon ver­i­fied that Eyman’s prin­ci­pal asset was his share of a house in Muk­il­teo’s Har­bour Pointe neigh­bor­hood. The fam­i­ly of Eyman’s for­mer spouse, Karen Williams, agreed last year to put up the mon­ey to effec­tive­ly buy out Eyman’s share, there­by pro­vid­ing a sig­nif­i­cant amount of funds to the estate and ensur­ing the home would stay with the fam­i­ly while end­ing Eyman’s own­er­ship inter­est in it. (Eyman had pre­vi­ous­ly bor­rowed against the home to finance ini­tia­tive schemes with­out Karen’s knowl­edge, accord­ing to plead­ings filed by her.)

In the motion ref­er­enced above, Bur­dette informed the Court that the remain­ing assets of the estate were sim­ply not worth pur­su­ing, and rec­om­mend­ed aban­don­ment as the best course of action. Bar­reca accept­ed this advice.

The three spe­cif­ic note­wor­thy assets men­tioned by Bur­dette in her plead­ing were:

  • A Note to evi­dence an oblig­a­tion owed to Debtor from the Debtor’s pri­or PAC, Per­ma­nent Offense (it is inter­est­ing that Per­ma­nent Offense is described as Eyman’s “pri­or Polit­i­cal Action Committee”);
  • An inter­est in the web­site (“URL”) “permanentoffense.com” (mean­ing, the domain name);
  • A polit­i­cal donor list main­tained by the Debtor (“List”).

“In the Trustee’s opin­ion, the poten­tial admin­is­tra­tion of these assets would not net a pos­i­tive return for cred­i­tors of the estate, and desires to aban­don them,” Bur­det­te’s lawyers at Schweet Linde & Rosen­blum PLLC explained.

With respect to the Note, they wrote:

“Though the Debtor sched­ules the Note with a val­ue of $411,000.00, the mak­er of the Note does not have the finan­cial abil­i­ty to repay the oblig­a­tion, and does not appear to have suf­fi­cient assets to cov­er the cost of lit­i­ga­tion to obtain a judg­ment. A judg­ment would be required pri­or to any col­lec­tion if the PAC refused to repay the oblig­a­tion. Because enforce­ment of the Note is not expect­ed to bring any return to cred­i­tors, the Trustee believes aban­don­ment is appropriate.”

It’s impor­tant to under­stand that the Debtor and the mak­er referred to above are one and the same: Tim Eyman. Eyman raid­ed his retire­ment account in order to finance Ini­tia­tive 976, his most recent unsuc­cess­ful attempt to gut fund­ing for mul­ti­modal trans­porta­tion infra­struc­ture across Wash­ing­ton State.

Eyman’s hope was to sub­se­quent­ly find wealthy bene­fac­tors to bail him out and allow his retire­ment account to be replen­ished, but none mate­ri­al­ized. Four years lat­er, it seems unlike­ly that any will, hence Bur­det­te’s con­clu­sion that the “mak­er of the Note does not have the finan­cial abil­i­ty to repay the obligation.”

With respect to Eyman’s domain name, they wrote:

“Though there may be some val­ue to the URL, there is a risk that Debtor, as he claims, does not have an inter­est in the URL. To dis­cov­er if the Debtor has an inter­est will require court orders to require the dis­clo­sure of this infor­ma­tion. Based on the hur­dles, the poten­tial lack of inter­est of the Debtor, and the delay seek­ing the answers will cause to final dis­tri­b­u­tions to cred­i­tors, the Trustee believes aban­don­ment of the URL is appro­pri­ate in her sound busi­ness judgment.”

Eyman def­i­nite­ly has an inter­est in the URL — if you go to permanentoffense.com, you’ll see Eyman’s pho­to front and cen­ter, with the words Tim Eyman: Per­ma­nent Offense on a shield-like icon. Whether or not Eyman has con­trol over the domain name is anoth­er mat­ter. Eyman is not an offi­cer of Per­ma­nent Offense, and the com­mit­tee is now inac­tive, hav­ing sus­pend­ed its fundrais­ing and oth­er activ­i­ties. It may be that the domain name is reg­is­tered to one of Eyman’s pals nowadays.

With respect to Eyman’s list, they wrote:

“Admin­is­tra­tion of the List would require the appoint­ment of a con­sumer pri­va­cy ombuds­man under 11 U.S.C. §332 before the List could be sold or leased [pre­sum­ably to some right wing enti­ty] to gen­er­ate rev­enue for the estate.”

“Based on the cost of ombuds­men in pri­or cas­es, the Trustee believes there is not suf­fi­cient val­ue in the List to off­set the cost of an ombuds­man. Because the admin­is­tra­tive cost of try­ing to sell or lease the List would be off­set if not eclipsed by admin­is­tra­tive costs, aban­don­ment of the List is appropriate.”

Last­ly, they wrote: “Final­ly, the Trustee, after a thor­ough inves­ti­ga­tion has not iden­ti­fied any oth­er non-exempt assets, oth­er than the cash in the estate’s bank account. The Trustee requests the order entered grant­i­ng this motion include a pro­vi­sion aban­don­ing all assets of the estate, oth­er than the cash that is cur­rent­ly in the estate’s bank account to allow the Trustee to pro­ceed with final dis­tri­b­u­tions and clo­sure of this matter.”

With Bar­reca now hav­ing approved this request, Bur­dette has the green light to wrap up her work and move on to oth­er cases.

Mean­while, Tim Eyman is out of busi­ness. His ini­tia­tive fac­to­ry effec­tive­ly no longer exists and he isn’t even pre­tend­ing to try to qual­i­fy any­thing to the bal­lot.

Instead, he’s spend­ing his time oppos­ing bills and levies he does­n’t like and cheer­ing on oth­ers, like his for­mer asso­ciate Lar­ry Jensen, who wants to qual­i­fy an ini­tia­tive to the 2024 Leg­is­la­ture (I‑2078) exempt­ing “law abid­ing gun own­ers” from Wash­ing­ton’s gun safe­ty laws. Jensen and his back­ers would need to col­lect around 425,000 or more sig­na­tures by Decem­ber 31st to qual­i­fy the mea­sure, which will be extreme­ly dif­fi­cult with­out paid peti­tion­ers. Eyman was a fea­tured speak­er at Jensen’s recent kick­off event for the mea­sure on Whid­bey Island.

NPI recent­ly pre­vailed over Eyman in our long­stand­ing efforts to pass leg­is­la­tion repeal­ing what he calls advi­so­ry votes, but which were real­ly push polls that served as a bar­ri­er to vot­ing. The bill was signed into law about a month ago and takes effect this July, which means that for the first time since 2006, there will be noth­ing on Wash­ing­to­ni­ans’ bal­lots authored by Eyman.

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