POOR ERIC HILTON. Seattle's slipperiest landlord, last seen shirking his city-imposed responsibility to pay relocation assistance to tenants forced by the city to vacate a dilapidated property he owns in Wallingford (see "Renter's Nightmare," Nov. 22, 2001), has filed for Chapter 7 bankruptcy, claiming an inability to pay the approximately $76,000 in judgments held against him by the city. In financial records filed on Jan. 7, Hilton claimed to have no property, no assets, no income, no address, and no expenses. Skeptics—and there are many where Hilton is concerned—may well wonder how the notorious landlord can claim to have no assets, much less no income or living expenses. But those who've watched Hilton maneuver through the legal system over more than 15 years as a Seattle landlord and rental agent suspect he's simply found another legal loophole to slither through.
Hilton has done battle with the city dozens of times, and every time, the landlord has managed to flit away with every feather in place. Although Hilton did spend a brief stint in jail for retaliating against a tenant by illegally locking him out of his apartment, the city has yet to collect on any of its judgments against him, and if his latest legal maneuver works, they may be waiting longer still. By filing for Chapter 7 bankruptcy, Hilton will become eligible to erase his debts by turning all of his assets over to a court-appointed trustee. But if Hilton can convince the court he has no assets to deliver, he may be able to escape bankruptcy proceedings untouched.
How can a landlord have no property? It's easy if you know how to shuffle the papers. For years, Hilton bought up properties and transferred their titles to various limited partnerships; county tax records and filings at the Washington secretary of state's office show that Hilton is the registered agent, or official representative, for a dozen partnerships whose property value totals well in excess of $2 million. But officially, the properties are owned by the partnerships, not Hilton.
That may be why he was able to claim inability to pay back reported debts of between $50,001 and $100,000: Although Hilton lives in a $285,000 house in an upscale Eastside suburb, on paper he might as well be spending his nights in Tent City. Lars Neste, an attorney representing Hilton in his dealings with the city, would not comment on his client's assets or the city's judgments against him.
Tenant advocates say Hilton has had a long career as a financial contortionist. Arlen Olson, head of the Washington Tenants Union, says he's "never seen a landlord, especially a landlord who has so much property, take such drastic measures to avoid paying a debt."
One consequence of Hilton's bankruptcy filing, according to Thom Castagna with the Seattle city attorney's office, is that "all his cases are stayed until [Hilton's claim] can be processed through the system"— a process that could take months or years.
Those cases include the civil suit filed by local architect Art Skolnik for the $2,000 in assistance Hilton owes Skolnik's son, Joshua, a former tenant. Skolnik had hoped to serve Hilton with that lawsuit during his scheduled court appearance on Dec. 11. After Hilton failed to appear for that hearing, Skolnik turned his mission toward City Hall, seeking legislation that would create a revolving fund to provide low-income tenants (those making less than 50 percent of the Seattle median income) with immediate assistance when they're forced to move by a city condemnation order; the fund would be replenished when landlords paid the city what they owed.
Currently, the responsibility for paying relocation assistance falls to the very landlords who fail to keep their properties livable, an irony that has not escaped city regulators. "I haven't seen anybody pay [the assistance] yet who's had an emergency order to vacate," says DCLU housing enforcement director Jim Metz, whose office is drafting the legislation. "It doesn't take very many of these [cases] to make it clear that these tenants are put at a very significant disadvantage."
Metz says he anticipates the legislation will be greeted warmly by the City Council. "It would be hard to fathom people not supporting it, because these are truly low-income people [who are] having to move with 24 or 72 hours notice," Metz says. "Most people are only a couple of paychecks away from being in default on their mortgage or bills anyway, so you can imagine how it is for low-income people."
Meanwhile, Skolnik is pushing forward on yet another front, though with substantially less encouragement from the city: He's trying to convince the council to make the ordinance retroactive so that his son's relocation assistance could be paid from the new revolving fund. So far, he's had little luck convincing city officials to make the exception. "It's not going to be retroactive," council staffer Lisa Herbold says bluntly. "I understand Art's frustration, but the city didn't put him in this position—his son's landlord did." Skolnik rebuts that the city knew the law was unenforceable. "The landlord was never going to pay the relocation assistance," Skolnik says. "I just don't think the creative minds are at work—the bureaucrats are putting things together. I'm down to my terrier instincts, and I'm ready to hound the city further."