4889-3334-3822.1 

KUTAK ROCK LLP 

Jeremy S. Williams (VSB No. 77469) 

Adolyn C. Wyatt (VSB No. 97746) 

901 East Byrd Street, Suite 1000 

Richmond, Virginia 23219 

Telephone: (804) 644-1700 

jeremy.williams@kutakrock.com 

adolyn.wyatt@kutakrock.com 

Counsel to Peter J. Barrett, Trustee 

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE EASTERN DISTRICT OF VIRGINIA 

RICHMOND DIVISION 

IN RE: 

) 

) Chapter 7

)

DAVID WAYNE SCHNEIDER, ) Case No. 21-30347 (KLP)

)

Debtor. )

)

)

PETER J. BARRETT, TRUSTEE, )

)

Plaintiff, )

)

v. ) Adv. Proc. No. ____________

)

TERESA SCHNEIDER HEATH, )

)

Defendant. )

)

COMPLAINT 

Peter J. Barrett, Chapter 7 Trustee for the Bankruptcy Estate of David Wayne Schneider 

(“Trustee”), by counsel, files this Complaint pursuant to 11 U.S.C. §§ 362, 542, 544, 549 and 550, 

Virginia Code §§ 55.1-400 through 403 and Rule 7001 of the Federal Rules of Bankruptcy 

Procedure to recover damages from, and avoid certain transfers to, Teresa Schneider Heath 

(the “Defendant”). In support thereof, the Trustee states as follows: 

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4889-3334-3822.1 

PARTIES 

1. On February 2, 2021 (the “Petition Date”), David Wayne Schneider (the “Debtor”) 

filed a voluntary petition under Chapter 7 of the United States Bankruptcy Code (the “Bankruptcy 

Code”) in this Court. 

2. The Trustee was appointed to administer the Debtor’s bankruptcy estate and 

continues to serve as trustee in this case. 

3. The Defendant is the Debtor’s sister and currently resides in Hanover, Virginia. 

JURISDICTION AND VENUE 

4. This adversary proceeding is a core proceeding pursuant to 28 U.S.C. 

§§ 157(b)(2)(A) and (F). 

5. This Court has subject matter jurisdiction over this adversary proceeding pursuant 

to 28 U.S.C. § 1334. 

6. This Court is the proper venue pursuant to 28 U.S.C. § 1409. 

7. This Court has personal jurisdiction over all necessary parties pursuant to Rule 

7004(f) of the Federal Rules of Bankruptcy Procedure. 

FACTS 

The Property 

8. Pursuant to a Deed of Gift dated July 2, 2004, John L. Schneider, Jr. and Myrna W. 

Schneider, the Debtor’s parents and the Debtor, granted to themselves certain real property located 

at 6319 Cold Harbor Road, Mechanicsville, Virginia (the “Property”). A true and correct copy of 

the Deed of Gift is attached hereto as Exhibit A. 

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4889-3334-3822.1 

9. The Property is more particularly described as follows: 

All that certain lot, piece or parcel of land, with improvements 

thereon, lying and being in Henry Magisterial District, Hanover 

County, Virginia, being Lot 1, Block A, Section 1, on the Plan of 

Hanover Farms, made by LaPrade Bros., Civil Engineers, 

Richmond, Virginia, dated May 20, 1957, and recorded July 31, 

1957, in Plat Book 24, Page 115, in the Clerk’s Office of the Circuit 

Court of Hanover County, Virginia, to which plat reference is 

hereby made for a more particular description of said lot. 

Being the same real estate conveyed to John L. Schneider, Jr. and 

Myrna W. Schneider, husband and wife, and David Wayne 

Schneider and Kellie Allen Schneider, husband and wife, by deed of 

gift from John L. Schneider, Jr. and Myrna W. Schneider dated June 

12, 1992, and recorded in the Clerk’s Office of the Circuit Court of 

Hanover County, Virginia on June 17, 1992, in Deed Book 920 at 

Page 119. 

10. On April 16, 2016, Myrna Schneider passed away. Upon the passing of 

Ms. Schneider, the Property was thereafter owned as tenants-in-common by the Debtor and his 

father, John L. Schneider, Jr., at all relevant times, including as of the Petition Date. 

11. On April 12, 2021, after the Petition Date, John L. Schneider, Jr. and the Debtor 

executed a Quitclaim Deed in which they conveyed the Property to themselves and to the 

Defendant. As such, the Debtor and John L. Schneider, Jr. each attempted to grant the Defendant 

a 1/6 interest of their interest in the Property (the “Postpetition Transfer”). A copy of the Quitclaim 

Deed is attached hereto as Exhibit B. 

12. The approval of this Court was neither sought nor received in connection with the 

Postpetition Transfer. 

13. On May 1, 2021, John L. Schneider, Jr. passed away. 

14. Upon information and belief, absent the Postpetition Transfer, the interest of John 

L. Schneider, Jr. in the Property would have passed to the Debtor. 

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4889-3334-3822.1 

15. As such, and absent the Postpetition Transfer, the Debtor would be the sole owner 

of the Property. 

16. Based on certain public information, the Property is currently encumbered by: (i) a 

lien in favor of Wells Fargo Bank, N.A. in the approximate amount of $58,000.00; (ii) a lien in 

favor for the Internal Revenue Service for $382,445.54; (iii) a lien in favor of Hanover County in 

the amount of $15,000.00; (iv) a lien in favor of Justin Regensburg in the amount of $2,500.00; 

and (v) a lien in favor of Daniel Geiger in the amount of $10,000.00. 

17. A potential settlement has been recached, subject to Court approval, with respect 

to the lien of the Internal Revenue Service. 

18. Upon information and belief, the Property is currently valued at $276,500. 

COUNT I 

Avoidance of Fraudulent Transfers under Va. Code § 55.1-400 

19. The Trustee reasserts and realleges the facts contained in the paragraphs above as 

if they were fully set forth herein. 

20. The Postpetition Transfer was made within the last five years. 

21. The Postpetition Transfer was made with the sole purpose of delaying, hindering, 

or defrauding the creditors of the Debtor. 

22. The Postpetition Transfer is avoidable as fraudulent pursuant to Va. Code § 55.1-

400. 

WHEREFORE, the Trustee requests the Court to enter an order under 11 U.S.C. § 544 

and Va. Code § 55.1-400: (i) avoiding as fraudulent, the Postpetition Transfer made to the 

Defendants and (ii) awarding any further relief as the Court deems just and proper. 

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4889-3334-3822.1 

COUNT II 

Avoidance of Voluntary Conveyance Under Va. Code § 55.1-401 

23. The Trustee reasserts and realleges the facts contained in the paragraphs above as 

if they were fully set forth herein. 

24. At the time of the Postpetition Transfer, no consideration was received by the 

Debtor in connection with such Postpetition Transfer or any such consideration received is not 

deemed valuable at law. 

25. At the time the Postpetition Transfer was made, the Debtor was insolvent, or the 

Debtor was made insolvent thereby in that the Debtor was unable to meet his debts and obligations 

as they matured or came due, or in the alternative, the Debtor was thereby left with insufficient 

assets with which to meet his debts and obligations as they came due. 

26. The Defendant knew or should have known at the time of the Postpetition Transfer, 

that the Debtor was insolvent, and/or would be made insolvent thereby, but accepted the 

conveyance of assets for her own gain and to the detriment of the Debtor’s creditors. 

27. Given that Postpetition Transfer to the Defendant was made while the Debtor was 

insolvent or made such that it rendered the Debtor insolvent and that no consideration was received 

by the Debtor in connection therewith, the Postpetition Transfer is voidable pursuant to 

Va. Code § 55.1-401. 

 WHEREFORE, the Trustee requests the Court to enter an order under 11 U.S.C. § 544 

and Va. Code § 55.1-401: (i) avoiding the Postpetition Transfer and (ii) awarding any further 

relief as the Court deems just and proper. 

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4889-3334-3822.1 

COUNT III 

Recovery of Attorneys’ Fees Under Va. Code § 55.1-403 

28. The Trustee reasserts and realleges the facts contained in the paragraphs above as 

if they were fully set forth herein. 

29. This action is brought pursuant to Virginia Code §§ 55.1-400 and 401. 

30. Upon information and belief, the Defendant engaged in this scheme to assist the 

Debtor with defrauding his creditors notwithstanding her knowledge of his outstanding debts. 

31. In the event the Postpetition Transfer is avoided based on Virginia Code §§ 55.1-

400 or 401, the Trustee is entitled to recover attorneys’ fees against the Defendant. 

 WHEREFORE, the Trustee requests the Court to enter an order under 11 U.S.C. § 544 

and Va. Code § 55.1-403: (i) granting the Trustee attorneys’ fees in an amount to be established 

at trial and (ii) awarding any further relief as the Court deems just and proper. 

COUNT IV 

Avoidance of Unauthorized Post-Petition Transfers Pursuant to 11 U.S.C. § 549 

32. The Trustee reasserts and realleges the facts contained in the paragraphs above as 

if they were fully set forth therein. 

33. As of the Petition Date, the Property was owned one-half by the Debtor. 

34. Subsequent to the Petition Date, the Debtor transferred one-sixth of his one-half 

interest to the Defendant. 

35. The Postpetition Transfer was not authorized under the Bankruptcy Code or by this 

Court. 

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4889-3334-3822.1 

WHEREFORE, the Trustee requests the Court enter an order (i) avoiding the Postpetition 

Transfer as an unauthorized post-petition transfer pursuant to 11 U.S.C. § 549(a) and (ii) awarding 

any further relief the Court deems just and proper. 

COUNT V 

Sale of Defendant’s Interest in the Property Under 11 U.S.C. § 363(h) 

36. The Trustee reasserts and realleges the facts contained in the paragraphs above as 

if they were fully set forth therein. 

37. In the alternative and to the extent the Court determines that the Debtor is not the 

sole owner of the Property but is a tenant-in-common with the Defendant, the Trustee seeks 

authority to sell the Property pursuant to section 363(h). 

38. On the Petition Date, the Debtor owned an undivided interest in the Property as a 

tenant-in-common with his father. 

39. Upon avoidance of the Postpetition Transfer, the Debtor will either be the sole 

owner of the Property or a tenant-in-common with the Defendant. 

40. The Debtor’s interest in the Property constitutes property of the estate pursuant to 

11 U.S.C. § 541. 

41. The Trustee seeks authority to sell the Property free and clear of all liens and 

interests pursuant to 11 U.S.C. § 363(h). 

42. A partition in kind of the Property is impractical. 

43. The sale of the estate’s undivided interest would realize significantly less for the 

estate than a sale of the Property free and clear of the interests of the Defendant, if any exist. 

44. The benefit to the estate of a sale of the Property free and clear of any interest of 

the Defendant outweighs the detriment to the Defendant. 

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4889-3334-3822.1 

45. Upon information and belief, the Property is not used in the production, 

transmission, or distribution, for sale, of electric energy or of natural or synthetic gas for heat, 

light, or power. 

46. To the extent any dispute arises concerning the validity, extent, or priority of any 

lien or interest that encumbers the Property, such liens or interests shall attach to the net sales 

proceeds after deducting the costs of sale to the same extent and in the same priority as will be 

adjudicated in an adversary proceeding determining the validity, extent, and priority of all liens 

and interests in such net proceeds pursuant to 11 U.S.C. § 506. 

WHEREFORE, the Trustee requests the Court to enter an order (i) authorizing the sale of 

both the estate’s interest and the interest of the Defendant in the Property as set forth herein and 

(ii) awarding any further relief the Court deems just and proper. 

COUNT VI 

Award of Damages for Violation of the Automatic Stay Under 11 U.S.C. § 362 

47. The Trustee reasserts and realleges the facts contained in the paragraphs above as 

if they were fully set forth therein. 

48. Section 362(a) of the Bankruptcy Code stays any act to obtain possession of 

property of the estate or of property from the estate or to exercise control over property of the 

estate. 

49. By transferring the Property post-petition, the Defendant engaged in an act to obtain 

possession of property of the estate or of property from the estate or to exercise control over 

property of the estate. 

50. The Defendant’s transfer of the Property despite notice of the Debtor’s pending 

bankruptcy constitutes a willful violation of the automatic stay. 

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4889-3334-3822.1 

WHEREFORE, the Trustee requests the Court to enter an order (i) awarding him 

compensatory damages, punitive damages, and attorneys’ fees pursuant to 11 U.S.C. §362(k) in 

an amount to be determined a trial and (ii) awarding any further relief the Court deems proper. 

COUNT VII 

Turnover of Estate Property Pursuant 11 U.S.C. § 542 

51. The Trustee reasserts and realleges the facts contained in the paragraphs above as 

if they were fully set forth therein. 

52. The Property constitutes property of the Debtor’s estate pursuant to 11 U.S.C. § 

541. 

53. The Defendant is believed to be residing in the Property and is otherwise in 

possession of the Property. 

54. Absent the Defendant being in possession of the Property, the Trustee could use, 

sell, or lease the Property under 11 U.S.C. § 363. 

55. The Defendant has refused to turn over the Property to the Trustee. 

WHEREFORE, the Trustee requests the Court to enter an order (i) compelling the 

Defendant to turn over the Property and (ii) awarding any further relief the Court deems proper. 

PETER J. BARRETT, TRUSTEE 

 

By: /s/ Jeremy S. Williams 

KUTAK ROCK LLP 

Jeremy S. Williams (VSB No. 77469) 

Adolyn C. Wyatt (VSB No. 97746) 

901 East Byrd Street, Suite 1000 

Richmond, Virginia 23219 

Telephone: (804) 644-1700 

Facsimile: (804) 783-6192 

Jeremy.Williams@kutakrock.com 

Adolyn.Wyatt@kutakrock.com 

Counsel for Peter J. Barrett, Trustee 

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4863-8628-2062.1 

EXHIBIT A 

Deed of Gift 

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8733- 29- l 2-9SNH I I MIME III 20040812000001110 

III

Hanover County C rcuit Court 

8/12/2004 2:28:00 PM LR GIFT DEED 

PROPERTY IDENTIFICATION NUMBER: 

CONSIDERATION: GIFT 

THIS DOCUMENT WAS PREPARED BY: 

LENARD W. TUCK, JR., ESQ. 

TUCK & ASSOCIATES, PLC. 

BOOK2372 PA0E669 

THIS DEED OF GIFT, made this 2

nd day of July, 2004, by and 

between John L. Schneider, Jr. and Myrna W. Schneider, husband and 

wife, and David W. Schneider, single, Grantors, and John L. Schneider, Jr. 

and Myrna W. Schneider, husband and wife, and David W. Schneider, 

Grantees, whose address is 6319 Cold Harbor Road, Mechanicsville, 

Virginia 23111. 

WITNESSETH: 

That for and in consideration of love and affection, the Grantors grant 

and convey unto the Grantee, with General Warranty and English Covenants 

of Title, in fee simple, as joint tenants with the right of survivorship as at 

common law, the real estate described on the attached Schedule "A", made a 

part hereof by this reference. 

This conveyance is made subject to such covenants, restrictions, 

conditions and easements of record that may lawfully affect the subject 

property. 

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BIB 2372 PAH 670 

WITNESS the following signature and seal: 

(SEAL) 

hn L. Schneider 

LCj, t, (SEAL) 

Myria W. Schnei er 

14)• (SEAL) 

Dl viii W. S eider 

STATE OF VIRGIIVI 

CITY/GO T:NT-Y-OF y%, e.A Aloha( , TO-WIT: 

This instttitnent was signed and acknowledged before me, a notary 

public for the aforesaid jurisdiction, by John L. Schneider and Myrna W. 

Schneider, husband and wife, and David W. Schneider, single, grantots, this 

4fici day of July, 2004. 

(SEAL) 

tary Public 

My commission expires 3 ca_o 06 

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- elk•GC,1O-(1-

ALL that certain lot, piece or parcel of land, 

with improvements thereon, lying and being in 

Henry Magisterial District, Hanover County, 

Virginia, being Lot 1, block A, Section 1, on 

the Plan of Hanover Farms, made by LaPrade 

Bros., Civil thgineers, Richmond, Virginia, 

dated May 20, 1957, and recorded July 31, 1957, 

in Plat Book 24, Page 115, in the Clerk's Office 

of the Circuit Court of Hanover County, Virginia, to which plat reference is hereby made for 

a more particular description of said lOt. 

BEING the same real estate conveyed to John L. 

Schneider, Jr. and Myrna W. Schneider, husband 

and wide, and David Wayne Schneider and kellie 

Allen Schneider, husband and wife, by deed of 

gift from John L. Schneider, Jr. and Myrna W. 

Schneider dated June 1.2, 1992, and recorded in 

the Clerk's Office of the Circuit Court of 

Hanover County, Virginia on June 17, 1992, in 

Deed Book 92b at Page 119. 

INSTRUMENT #040018007 

RECORDED IN THE CLERK 'S OFFICE OF 

HANOVER ON 

AUGUST 12, 2004 AT 02:28RM 

FRADMh D. W GROVE, JR., CLERK 

BY: - (DC 

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4863-8628-2062.1 

EXHIBIT B 

Quitclaim Deed 

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PROPERTY IDENTIFICATION NUMBER: 8733-29-1295 

CONSIDERATION: GIFT EXEMPTION PER VC SECTION 55.1-811d 

THIS DOCUMENT WAS PREPARED By: 

LENARD W. TUCK, JR., ESQ. (VSB 21922) 

THIS QUITCLAIM DEED, made this 12th day of April, 2021, by 

and between John L. Schneider, Jr. and David W. Schneider, Grantors, and 

John L. Schneider, Jr., David W. Schneider and Teresa Schneider Heath, 

Grantees, whose address is 6319 Cold Harbor Road, Mechanicsville, 

Virginia 23111. 

WITNESSETH: 

That for and in consideration of love and affection, the Grantors do 

quitclaim unto the Grantees, in fee simple, as joint tenants with the right of 

survivorship as at common law, the real estate described on the attached 

Schedule “A”, made a part hereof by this reference. 

This conveyance is made subject to such covenants, restrictions, 

conditions and easements of record that may lawfully affect the subject 

property. 

A 

aigyz2ceoee2e30 

AA 

1/3 ae 3308 Pg: 

Hanover Co van 

04/23/2021 01:10:55 PM 

DEED EX

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WITNESS the following signature and seal: 

hb fe bite fo EN) 

hn L. Schneider, Jr 

Aruiifu Agee Hehe 4s.ar) David W. Schheider 

STATE OF VIRGINIA, 

CITY/COUNTY OF HANOVER, TO-WIT: 

This instrument was signed and acknowledged before me, a notary 

public for the aforesaid Jurisdicy on, b John L. Schneider, Jr. and David W. 

Schneider, grantors, this 

 

 

(SEAL) 

MITTT YS Lobe 

A 

te 

A 

ate 

A 

2/3 pat 3308 Pg: 275 

Hosen Co VA @4/23/2021 01:12:55 PM 

DEED EX

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Schedule “A” 

ALL that certain lot, piece or parcel of land, lying and being in Henry 

Magisterial District, Hanover County, Virginia, being Lot 1, Block A, 

Section 1, on the Plan of Hanover Farms, made by LaPrade Bros., Civil 

Engineers, Richmond, Virginia, dated May 20, 1957, and recorded July 31, 

1957, in the Clerk’s Office of the Circuit Court of Hanover County, 

Virginia, to which plat reference is hereby made for a more particular 

description of said lot. 

20210423000080030 O CLERK'S 0 04/23/2021 01:10:58 pais SEC 58.1-802 GRANTOR ‘S TAX PD. $.20 K D.HARGROVE JR, CLE “ BY: WCLUFF2 RK 

LT 

svete sz200econe20 3/3 Bk: 3308 Pg: 276 Hanover Co VA 

04/23/2021 01:10:55 PM 

DEED EX

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