Large settlement agreed to by parties in Tim Eyman’s Chapter 7 bankruptcy case :: NPI’s Cascadia Advocate

Tim EmanThe nearly four-year-old bankruptcy may soon be over.

A grand settlement backed by the estate court-appointed trustee and agreed to by all parties involved in the right-wing activist’s Chapter 7 case was submitted to bankruptcy court judge Marc Barreca for final approval last month. next, the cases recently filed with the court and reviewed by the NPI show.

“To avoid the additional time, cost and expense of litigation, the parties have engaged in mediation,” says a pleading filed by attorneys for the trustee.

“The parties now wish to settle all remaining claims related to the adversarial proceedings and certain other matters related to the bankruptcy. […] In the trustee’s view, the relief sought should be granted in full to give effect to the negotiated settlement, which is in the best interest of the creditors. »

Eyman’s bankruptcy began in November 2018 as a maneuver to avoid Washington state’s major campaign finance enforcement lawsuit against him. After the state obtained a comfort order allowing him to sue despite the bankruptcy, Eyman decided to deny his Chapter 11 petition. But Judge Barreca said no.

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

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

The main item belonging to the estate is a house – or, in legal parlance, real estate – in the Harbor Pointe neighborhood of Mukilteo.

Under the terms of the settlement, the brother of Tim Eyman’s former wife, Karen, will provide the funds to purchase this family home, freeing it from the defunct Eyman marital community. The arrangement will see Karen (who now goes by her old surname of Williams, under the proposed settlement) stay in the house and become its sole owner.

The agreement stipulates that the Williams family will pay $906,484 to purchase the house and its facilities and the estate, which is now under the guardianship of trustee Virginia Burdette. After the sale closes, Burdette will have a large sum of money to settle Eyman’s debts.

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

“The cash payment agreed to by Karen Williams to purchase the Mukilteo house represents the most efficient and least expensive way to liquidate the property,” Burdette’s attorneys told Judge Barreca. “Although the Mukilteo House is owned by the Estate, the Trustee acknowledges that should Karen Williams be found to have a separate real estate interest, the Trustee’s ability to quickly market the property for sale to an arm’s length buyer could be significantly hampered, and would require additional litigation to sell a condominium property.

Eyman’s main creditor is the people of Washington State, to whom he owes millions of dollars for gross and obscene violations of the state’s public disclosure laws. His other creditor is 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. These companies participate in the settlement and its approval would terminate the proceedings.

The draft order submitted to Barreca is described as “an order approving the settlement of adversarial proceedings, allowing the abandonment of certain property and authorizing the sale of real estate free and clear of liens and other interests”.

The property to be abandoned consists mainly of two cars, household furniture and jewelry. These are things that Tim Eyman and Karen Williams owned jointly through their marriage, but which would benefit the family to keep and which would not bring much money to the estate if they were to be sold. Consequently, the trustee asks Judge Barreca to authorize their abandonment.

Barreca will consider Trustee Burdette’s motion in about a month, at a hearing scheduled for August 10 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 proceedings) by Vortman & Feinstein.

As longtime readers may recall, Eyman has used his family’s Mukilteo home in the past as collateral for US Bank loans to fund signature drive initiatives.

Those days are over.

Karen Williams said in court that she was unaware of this arrangement, even though it was known to the public due to Eyman’s announcement via her mailing list. With the house now wholly owned by Karen Williams, it will no longer be available to Eyman as a tool to fund more destructive programs that would defund essential public services for Washingtonians.

It’s a good result for the Williams family and for Washingtonians.

Karen Williams also told federal bankruptcy court in an earlier filing that her divorce from Tim Eyman was stalled due to Eyman’s procrastination. Snohomish County Superior Court records confirm this. They show Eyman filed for divorce in May 2019. A second case was filed by Karen Williams in March 2022, with Eyman as a defendant. This divorce case has followed a parallel path to that of this bankruptcy settlement negotiation.

In a recent email missive, Eyman characterized Attorney General Bob Ferguson’s efforts to hold him accountable for his breaking the law as resulting in the loss of home. But as Eyman is well aware, this proposed settlement will allow his ex, Karen Williams, to stay in the house and own it free and clear.

The family is like this not losing the family home as Eyman’s missive implicated him in a sympathy scheme. The only thing lost here is Eyman’s stake in the house, which he himself has put in jeopardy due to the wrong choices he has repeatedly made. Eyman has not resided in the Mukilteo household for some time. By his own admission, he moved years ago and now lives in Bellevue Towers, in a condo that is too belonging to the Williams family.

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

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