A notorious Richmond landlord has filed his response to allegations that he schemed to defraud creditors in a bankruptcy case – a complaint that is now headed for trial.
A pre-trial conference was held Wednesday in the case against Oliver Lawrence, who, after filing for personal bankruptcy and claiming to have no assets, was accused by a Chapter 7 trustee in February of plotting with his wife Kim to move money and assets between them and out of the reach of creditors.
A two-day trial is scheduled Dec. 10 and 11 at the Richmond federal courthouse. U.S. Bankruptcy Judge Kevin Huennekens will preside over the trial.
Last week, Lawrence’s attorney filed a response to the complaint, which was amended following a Feb. 20 hearing to include two more business entities found by the trustee to be tied to Lawrence.
Those entities – Copra House LLC and Copra House Properties LLC – join the list of defendants named in the complaint that includes Lawrence, Kim, and Lawrence entities Chamberlayne Auto Sales & Repair (CASR), LBKBL Properties and Auto Center Holdings.
The complaint alleges the couple has a history of putting their assets under Kim’s name following Lawrence’s conviction in 2009 of multiple violations related to his home rental business. One such allegation was the 2010 transfer of their 7,000-square-foot Hanover County home from Lawrence to Kim.
The complaint was filed Feb. 5 on behalf of Peter Barrett, a Kutak Rock attorney serving as the trustee in the Chapter 7 bankruptcy proceedings. A preliminary injunction prohibits the Lawrences from transferring property or money in excess of $20,000 without Barrett’s approval.
In his response, filed March 26, Lawrence denies several sections of the complaint and admits others, including Kim’s employment and income and that Kim is the sole member and owner of LBKBL and that Lawrence manages the majority of its business affairs.
LBKBL was the latest iteration of Lawrence’s home rental business, according to the complaint, which notes he did business under previous entities LSU LLC and Bayou Properties LLC. At the time of his meeting with creditors last year, Lawrence said his home rental business totaled over 1,200 properties.
Lawrence’s holdings over the years have included three properties on East Grace Street once referred to as “Little Baghdad.” Those buildings went to the auction block in 2010 and were later purchased in 2016 in a $2.07 million deal. At least seven of his other properties went to foreclosure auction in 2013.
After Lawrence’s 2009 conviction, in which he was ordered to serve 30 days in jail followed by 40 days in one of his rundown properties, Lawrence formed LBKBL in Kim’s name, the complaint states, “solely to elude the legal and financial obligations (Oliver) Lawrence accrued during his prior businesses.”
While Lawrence has told creditors that he claims no assets, according to the complaint, Kim, a pharmacist at a Richmond-area hospital, claims a total of $18.45 million in assets and $2.53 million in debts, making her total net worth $15.92 million.
While Lawrence’s response confirms those figures, it goes on to deny the extent to which Lawrence has contributed, beyond management, toward the company’s capitalization. It also states that Lawrence did not have a salary and that personal bills were paid and his income taxes are being amended.
The response also admits Lawrence ran and operated CASR for most of its existence. According to the complaint, CASR was strategically put under Kim’s name as owner, even though Lawrence effectively ran it.
According to the complaint, CASR had $2.6 million in revenue in 2015 and $1.5 million in 2016. LBKBL owned $2.5 million in real estate and collected almost $350,000 in annual rents by the end of 2016, the complaint states.
The response states that CSAR paid “substantial funds” on LBKBL’s behalf “but only for the purpose that LBKBL paid several hundred thousand dollars’ worth of CSARs expenses.” The response goes on to say “It is specifically denied that there was any preferential transfer or intent to defraud.”
Lawrence is represented by Robert Hill of Colonial Heights law firm Hill & Rainey Attorneys.
Kutak Rock’s Jeremy Williams and co-counsel Thomas Domonoske of Newport News-based Consumer Litigation Associates are working the case on behalf of Barrett.
The trial in December would decide the complaint’s requests for judgments against the Lawrences, the amount of such judgment, and punitive damages, attorney’s fees and other costs requested.