December 22nd, 2021
NPI/Permanent Defense statement on conversion of Tim Eyman’s bankruptcy to Chapter 7
Statements & Advisories
Last week, United States Bankruptcy Court Judge Marc Barreca granted the State of Washington’s motion to convert Tim Eyman’s three year old bankruptcy from a Chapter 11 case to a Chapter 7 case and subsequently appointed Virginia A. Burdette to serve as the proceeding’s Chapter 7 trustee, as detailed in this Cascadia Advocate post. Barreca’s order to convert was issued about three months after Tim Eyman began missing deadlines for required monthly payments he was obligated to make to the State of Washington under his previous Chapter 11 plan.
Northwest Progressive Institute founder and executive director Andrew Villeneuve, who has been keeping an eye on the proceedings, commented that the conversion is a significant development in the bankruptcy case.
“When Tim Eyman first filed for bankruptcy in November of 2018, it appeared that his objective was to halt Attorney General Bob Ferguson’s main campaign finance enforcement lawsuit (case no. 17-2-01546-34) in Thurston County Superior Court,” said Villeneuve.
“At the time, the trial had not taken place and no judgment had been recorded.”
“This gambit failed, however, when Ferguson obtained a comfort order from the Bankruptcy Court allowing the case in Thurston County Superior Court to proceed. Not long after, Eyman tried to get his bankruptcy case dismissed, but Judge Barreca refused to grant his motion, and Eyman thus stayed in Chapter 11.”
“Now, having lost in Thurston County Superior Court and racked up even more legal bills, Eyman really is bankrupt. But he probably could have stayed in Chapter 11 if he had simply continued to make his required monthly payments instead of defaulting.”
“By defaulting, he triggered the provision of his bankruptcy plan that gave the State of Washington grounds to move for a Chapter 7 conversion… an action the State actually requested the Court take more than two years ago, in the spring of 2019, but which Barreca declined to do at the time.”
“Eyman regularly asserts that he is the victim of an unjust persecution. But the reality is, he’s in a hole that he dug for himself… a hole that he continues to enlarge and deepen. Now, a trustee will determine what assets are available to satisfy Eyman’s debts, most of which are owed to the people of Washington State.”
The next big battle in the bankruptcy case will concern the fate of the home that Eyman and his wife Karen (who are separated) own in Mukilteo. The State asserts that the home is a community asset subject to the State’s judgment entered in State of Washington v. Tim Eyman, et al.
Karen Eyman contends the home is her separate property.
A trial has been scheduled for next March to decide the issue.
See this Cascadia Advocate post for a copy of the judge’s ruling and additional case documents.