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.