Frost Bank v. Hickman II

IN THE UNITED STATES BANKRUPTCY COURT October 10, 2025

FOR THE SOUTHERN DISTRICT OF TEXAS Nathan Ochsner, Clerk

HOUSTON DIVISION

IN RE: §

§ CASE NO: 24-32697

WILLIAM MASTON HICKMAN II, §

§ CHAPTER 7

Debtor. §

§

FROST BANK, §

§

Plaintiff, §

§

VS. § ADVERSARY NO. 24-3145

§

WILLIAM MASTON HICKMAN II and §

DOOR EAGLE, §

§

Defendants. §

MEMORANDUM OPINION

This adversary stems from two promissory notes between Frost Bank and Door Eagle LLC,

with William M. Hickman, II as a guarantor of those promissory notes. Frost Bank brought this

adversary seeking damages against William M. Hickman, II and Door Eagle LLC for their failure

to perform under the promissory notes and guarantee, and to have the resultant judgement debt

owed by William M. Hickman, II deemed non-dischargeable pursuant to 11 U.S.C. § 523(a)(2)(B).

As to the breach of contract claims, the Court entered summary judgement in this adversary in

favor of Frost Bank, awarding Frost Bank actual damages and prejudgment interest in the total

amount of $1,235,536.98, plus interest of $310.95 per day under Section 304.002 of the Texas

Finance Code. On August 20, 2025, the Court conducted a one day trial and for the reasons stated

herein, the Court finds that the judgement debt owed to Frost Bank by William M. Hickman, II in

the total amount of $1,235,536.98, plus interest of $310.95 per day under Section 304.002 of the

Texas Finance Code, is not excepted from discharge pursuant to 11 U.S.C. §523(a)(2)(B).

Additionally, because the judgement debt owed to Frost Bank by William M. Hickman, II in the

total amount of $1,235,536.98, plus interest of $310.95 per day, is not excepted from discharge

pursuant to 11 U.S.C. § 523(a)(2)(B), Plaintiff’s claim in its complaint for reasonable and

necessary attorney fees under Tex. Civ. Prac. & Rem. Code § 38.00 must be denied.

I. FINDINGS OF FACT

This Court makes the following findings of fact and conclusions of law pursuant to Federal

Rule of Civil Procedure 52, which is made applicable to adversary proceedings pursuant to Federal

Rule of Bankruptcy Procedure 7052. To the extent that any finding of fact constitutes a conclusion

of law, it is adopted as such. To the extent that any conclusion of law constitutes a finding of fact,

it is adopted as such. This Court made certain oral findings and conclusions on the record. This

Memorandum Opinion supplements those findings and conclusions. If there is an inconsistency,

this Memorandum Opinion controls.

A. Background

1. On June 8, 2024 (the “Petition Date”) William M. Hickman, II (“Debtor or Defendant”) filed

for bankruptcy protection under chapter 7 of the Bankruptcy Code1 initiating the bankruptcy

case.2

2. On July 17, 2024, Frost Bank, (“Plaintiff”) initiated this instant adversary proceeding3 and filed

an amended complaint on December 6, 2024 (the “Complaint”).4

3. On December 30, 2024, Plaintiff filed its Notice of Consent to the entry of a final judgment on

all non-core matters by this Court.5

1 Any reference to “Code” or “Bankruptcy Code” is a reference to the United States Bankruptcy Code, 11 U.S.C., or

any section (i.e.§) thereof refers to the corresponding section in 11 U.S.C.

2 Bankr. ECF No. 1. “Bankr. ECF” refers docket entries made in the Debtor’s bankruptcy case, No. 24-32697. Entries

made in Plaintiff’s Case number 24-3145 shall take the format of ECF No. __.

3 ECF No. 1.

4 ECF No. 22.

5 ECF No. 23.

4. On January 3, 2025, Debtor filed an answer (the “Answer”) where Debtor expressly consented

to the entry of a final judgment on all non-core matters by this Court.6

5. On Wednesday, August 20, 2025 the Court conducted a one-day trial and now issues its instant

Memorandum Opinion and accompanying Judgment.7

II. CONCLUSIONS OF LAW

A. Jurisdiction and Venue

This Court holds jurisdiction pursuant to 28 U.S.C. § 1334 and exercises its jurisdiction in

accordance with Southern District of Texas General Order 2012–6.8 Section 157 allows a district

court to “refer” all bankruptcy and related cases to the bankruptcy court, wherein the latter court

will appropriately preside over the matter.9 This Court determines that pursuant to 28 U.S.C.

§ 157(b)(2)(A), (O) and (I), this proceeding contains core matters, as it primarily involves

proceedings concerning the administration of this estate and determinations as to the

dischargeability of particular debts.10 This proceeding is also core under the general “catch-all”

language because such a suit is the type of proceeding that can only arise in the context of a

bankruptcy case.11

This Court may only hear a case in which venue is proper.12 28 U.S.C. § 1409(a) provides

that “a proceeding arising under title 11 or arising in or related to a case under title 11 may be

6 ECF No. 24 at ¶ 5.

7 Aug. 20, 2025 Min. Entry.

8 In re: Order of Reference to Bankruptcy Judges, Gen. Order 2012–6 (S.D. Tex. May 24, 2012).

9 28 U.S.C. § 157(a); see also In re: Order of Reference to Bankruptcy Judges, Gen. Order 2012-6 (S.D. Tex. May

24, 2012).

10 See 11 U.S.C. § 157(b)(2)(A) & (O).

11 See Southmark Corp. v. Coopers & Lybrand (In re Southmark Corp.), 163 F.3d 925, 930 (5th Cir. 1999) (“[A]

proceeding is core under § 157 if it invokes a substantive right provided by title 11 or if it is a proceeding that, by its

nature, could arise only in the context of a bankruptcy case.”) (quoting Wood v. Wood (In re Wood), 825 F.2d 90, 97

(5th Cir. 1987)).

12 28 U.S.C. § 1408.

commenced in the district court in which such case is pending.” Debtor’s main bankruptcy case

is pending in this Court and therefore, venue of this proceeding is proper.

B. Constitutional Authority to Enter a Final Order

While bankruptcy judges can issue final orders and judgments for core proceedings, absent

consent, they can only issue reports and recommendations on non-core matters.13 The instant

complaint pending before this Court is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A),

(O) and (I). Accordingly, this Court concludes that the narrow limitation imposed by Stern does

not prohibit this Court from entering a final order here.14 Alternatively, this Court has

constitutional authority to enter a final order because all parties in interest have expressly

consented, impliedly if not explicitly, to adjudication of this dispute by this Court.15 Plaintiff and

Debtor have expressly consented to entry of final orders on non-core matters by this Court.16 No

other parties has ever objected to this Court’s constitutional authority to enter a final order or

judgment. These circumstances unquestionably constitute implied consent. Thus, this Court wields

the constitutional authority to enter a final order here.

III. ANALYSIS

A. Joint stipulation of facts

13 See 28 U.S.C. §§ 157(b)(1), (c)(1); see also Stern v. Marshall, 564 U.S. 462, 480 (2011); Wellness Int’l Network,

Ltd. v. Sharif, 135 S. Ct. 1932, 1938–40 (2015).

14 See, e.g., Badami v. Sears (In re AFY, Inc.), 461 B.R. 541, 547-48 (8th Cir. BAP 2012) (“Unless and until the

Supreme Court visits other provisions of Section 157(b)(2), we take the Supreme Court at its word and hold that the

balance of the authority granted to bankruptcy judges by Congress in 28 U.S.C. § 157(b)(2) is constitutional.”); see

also Tanguy v. West (In re Davis), No. 00-50129, 538 F. App’x 440, 443 (5th Cir. 2013) (“[W]hile it is true that Stern

invalidated 28 U.S.C. § 157(b)(2)(C) with respect to ‘counterclaims by the estate against persons filing claims against

the estate,’ Stern expressly provides that its limited holding applies only in that ‘one isolated respect’ .... We decline

to extend Stern’s limited holding herein.”) (Citing Stern, 564 U.S. at 475, 503, 131 S.Ct. 2594).

15 Wellness Int’l Network, Ltd. v. Sharif, 575 U.S.655, 135 S. Ct. 1932, 1947, 191 L.Ed.2d 911 (2015) (“Sharif con-

tends that to the extent litigants may validly consent to adjudication by a bankruptcy court, such consent must be

expressed. We disagree. Nothing in the Constitution requires that consent to adjudication by a bankruptcy court be

express. Nor does the relevant statute, 28 U.S.C. § 157, mandate express consent . . . .”).

16 ECF Nos. 23; 24.

On April 23, 2025, the parties filed their Joint Pretrial Order17 which contained the following

stipulation of facts with citations to the record:

1. On January 14, 2014, Debtor and Judith A. Noble (“Mrs. Noble”) entered into a

prenuptial agreement (the “Prenuptial”).18

2. The Prenuptial identified Debtor’s and Mrs. Noble’s separate property prior to the

marriage.19

3. Debtor identified the following as his separate property: 10034 Meadowlake Lane

Houston, Texas 77042 (the “Meadowlake Property”) and 14511 Waterville Way

Houston, Texas 77015 (the “Waterville Property”). 20

4. Mrs. Noble identified the following as her separate property: 904 Memorial Village

Drive Houston, Texas 77024 (the “Memorial Village Property”). 21

5. On or about August 11, 2016, Debtor purchased the real property located at 317

Kingfisher Point, McCormick, SC 29835 (the “Kingfisher Property”) 22

6. On or about August 19, 2016, Debtor conveyed Kingfisher Property to himself and Mrs.

Noble.23

7. On June 6, 2017, Debtor provided his Personal Financial Statement (the “2017 PFS”) to

Plaintiff. 24

8. The 2017 PFS identified the Meadowlake Property as Debtor’s homestead and valued it

at $600,000 with a $90,000 mortgage for a net equity interest of $510,000.25

9. The 2017 PFS identified the Kingfisher Property as Debtor’s wholly owned real estate

and valued it at $580,000 with a $300,000 mortgage for a net equity interest of

$280,000.26

10. The 2017 PFS identified the Waterville Property as Debtor’s wholly owned real estate

and valued it at $180,000 with no mortgage for a net equity interest of $180,000.27

17 ECF No. 36.

18 ECF No. 35-15.

19 ECF No. 35-15.

20 ECF No. 35-15 at 26.

21 ECF No. 35-15 at 28.

22 ECF No. 35-16.

23 ECF No. 35-17.

24 ECF No. 37-2.

25 ECF No. 37-2.

26 ECF No. 37-2.

27 ECF No. 37-2.

11. On or about October 17, 2017, Plaintiff, as lender, and Door Eagle, LLC (“Door Eagle”)

as borrower, executed a promissory note in the original principal sum of $370,604.29

(the “$370M Loan”). 28

12. In additional consideration for Plaintiff making the $370M Loan to Door Eagle, Debtor

executed a Commercial Guaranty (the “Hickman Guaranty”) whereby Debtor absolutely

and unconditionally guaranteed and promised to pay Plaintiff the indebtedness of Door

Eagle then existing or thereafter arising. 29

13. On or about October 19, 2018, Debtor provided his Personal Financial Statement (the

“2018 PFS”) to Plaintiff. 30

14. Debtor identified Mrs. Noble as his spouse on the 2018 PFS but represented to Plaintiff

that the 2018 PFS was an “Individual Statement.”31

15. Only Debtor, and not Mrs. Noble, signed the 2018 PFS. 32

16. The 2018 PFS reads, in part, as follows:

The undersigned specifically acknowledges and agrees that: (1) Frost Bank, a Texas

state bank, … (“Bank”) will rely on the information contained in and provided in

connection with this Statement, and all such information is given for the purpose of

obtaining a loan(s) or other extension of credit from the Bank (“Loan”); …

The undersigned certifies that the information provided in and given in connection

with the Statement is true and correct as of the date set forth opposite the signature(s)

on this Statement. … The undersigned acknowledges that any intentional or

negligent misrepresentation of such information may result in civil liability and/or

criminal penalties including, but not limited to, fine or imprisonment or both, under

the provisions of Title 18, United States Code, Section 1014 and liability for

monetary damages to the Bank and any other person or entity who may suffer any

loss due to reliance upon any misrepresentation which has been made in or in

connection with this Statement. 33

17. Schedule 7 of the 2018 PFS included a section for Debtor to list his homestead. Debtor did

not list any of his real estate as his homestead. 34

28 ECF No. 35-18.

29 ECF No. 35-19.

30 ECF No. 35-1.

31 ECF No. 35-1.

32 ECF No. 35-1.

33 ECF No. 35-1.

34 ECF No. 35-1.

18. Schedule 7 of the 2018 PFS also included a section for Debtor to list his “Other Wholly

Owned Real Estate.” In this section, Debtor listed the following real estate: the Waterville

Property; the Meadowlake Property; the Memorial Village Property; and the Kingfisher

Property.35

20. In the 2018 PFS, Debtor answered “No” to the question: “Were any of the Assets (i)

owned or claimed by your spouse before marriage, or (ii) acquired by your spouse during

marriage by gift or inheritances, or (iii) recovered for personal injuries sustained by your

spouse during marriage, or (iv) acquired from the proceeds of liquidations of any of the

preceding?” 36

21. On or about November 27, 2018, Plaintiff, as lender, and Door Eagle, as borrower,

executed a promissory note in the original principal sum of $750,000 (the “$750

Loan”).37

22. On July 19, 2019, Debtor deeded the Waterville Property to his son, William Hickman,

III.38

23. By letter dated January 17, 2020 (the “$370M Loan Demand Letter”), Plaintiff made a

formal demand upon Door Eagle and Debtor to honor the terms of the $370M Loan and

Hickman Guaranty and to pay the $370M Loan as agreed. 39

24. The $370M Loan Demand Letter gave Door Eagle and Debtor until 3:00 p.m. on January

22, 2020, to pay the principal balance and outstanding interest due on the $370M Loan.40

25. By letter dated January 17, 2020 (the “$750M Loan Demand Letter”), Plaintiff made

formal demand upon Door Eagle and Debtor to honor the terms of the $750M Loan and

Hickman Guaranty and to pay the $750M Loan as agreed. 41

26. The Demand Letter gave Door Eagle and Debtor until 3:00 p.m. on January 22, 2020, to

pay the principal balance and outstanding interest due on the $750M Loan.42

27. Door Eagle and Debtor did not make the payments on the $370M Loan or $750M Loan

as demanded.

28. On February 4, 2020, Plaintiff sued Door Eagle and Debtor in the 165th Judicial District

35 ECF No. 35-1.

36 ECF No. 35-1.

37 ECF No. 35-2.

38 ECF No. 37-5.

39 ECF No. 35-6.

40 ECF No. 35-6.

41 ECF No. 35-7.

42 ECF No. 35-7.

Court of Harris County, Texas in Cause No. 2020-07794, styled Frost Bank v. Door

Eagle, LLC and William Hickman, II. 43

29. On March 5, 2020, Mrs. Noble formed JNH Holdings, LLC, a South Carolina limited

liability company. 44

30. On May 29, 2020, Mrs. Noble sold the Memorial Village Property (an asset that Debtor

represented to Plaintiff as being owned by Debtor) for approximately $300,000. 45

31. None of the sales proceeds from the Memorial Village Property were paid to Plaintiff to

reduce Debtor’s indebtedness to Plaintiff.46

32. On April 21, 2022, Debtor and Mrs. Noble sold the Kingfisher Property. 47

33. On June 8, 2024, Debtor filed his Petition. 48

34. The only real estate identified in the Debtor’s Petition that Debtor identified on the

2018 PFS was the Meadowlake Property.49

35. At the meeting of creditors held on July 25, 2024, Debtor maintained that he never owned

the Memorial Village Property. 50

36. At the meeting of creditors held on July 25, 2024, Debtor maintained that he had sold the

Waterville Property to his son in 2017. 51

37. At the meeting of creditors held on July 25, 2024, Debtor maintained that the Kingfisher

Property was owned one half by Mrs. Noble who received one half of the proceeds of

the sale when it was sold in 2023. 52

38. Door Eagle defaulted on its obligation to make payments to Plaintiff under the terms of

the $370M Loan and the $750M Loan.53

39. Despite demand, Door Eagle refused to honor its obligations pursuant to the terms of

the $370M Loan and $750M Loan and Debtor has refused to honor his obligations

43 ECF No. 35-11.

44 ECF No. 35-12.

45 ECF No. 35-20.

46 ECF No. 36 at ¶ 34.

47 ECF No. 35-21.

48 ECF No. 35-13.

49 ECF No. 35-14 at 22, 35.

50 ECF No. 35-14 at 21.

51 ECF No. 35-14 at 33, 34.

52 ECF No. 35-14 at 33, 34.

53 ECF Nos. 36 at ¶ 41; 28 at 4.

pursuant to the terms of the Hickman Guaranty.54

B. The Complaint

In its Complaint, Plaintiff has pled the following causes of action, to wit: (1) breach of

contract claims for Debtor and Door Eagles’ failure to perform under the terms of the $370M Loan,

$750M Loan and Hickman Guaranty; (2) recovery of reasonable and necessary attorney fees

pursuant to the terms of the $370M Loan and $750M Loan and Tex. Civ. Prac. & Rem. Code §

38.001; and (3) a determination that the debt owed by Debtor to Plaintiff on the breach of contract

claims and associated attorney fees under Tex. Civ. Prac. & Rem. Code § 38.001 is non-

dischargeable pursuant to § 523(a)(2)(B).55

The Court granted summary judgment as to the breach of contract claims on March 4, 2025.56

Specifically, the Court award Plaintiff actual damages in the amount of $639,424.89, and

prejudgment interest in the amount of $596,112.09, for a total of $1,235,536.98, plus interest of

$58.01 per day on the $370M Loan, and $252.94 interest per day on the $750M Loan under Section

304.002 of the Texas Finance Code (the “Judgement Debt”).57 However, as to the claim for

attorney fees pursuant to Tex. Civ. Prac. & Rem. Code § 38.00, and non-dischargeability of debt

pursuant § 523(a)(2)(B), summary judgment was denied.58 On August 20, 2025, the Court held a

trial and determined that it would reserve ruling on the amount of attorney fees under Tex. Civ.

Prac. & Rem. Code § 38.00 pending ruling on whether the Judgement Debt owed to Plaintiff by

54 ECF Nos. 36 at ¶ 41; 28 at 4

55 ECF No. 22 at 6–8.

56 ECF No. 28.

57 ECF No. 28 at 4.

58 ECF No. 28 at 4.

Debtor is non-dischargeable under § 523(a)(2)(B).59 Thus, the Court will now determine whether

the Judgement Debt owed to Plaintiff by Debtor is non-dischargeable pursuant to § 523(a)(2)(B).

C. Credibility of witnesses

It is the Court’s duty to assess and weigh the credibility of witnesses.60 At trial, the Court

heard testimony from two witnesses: (a) Debtor and (b) Brian Fowler (“Mr. Fowler”). Mr. Fowler

is an account manager and representative of Plaintiff who testified as to his involvement in

assessing Debtor’s credit worthiness in connection with the $750M Loan and Hickman

Guarantee.61 At trial, Debtor and Mr. Fowler responded to questions clearly, completely, and

directly.62 Thus, the Court finds that each witness is credible and gives equal weight to the

testimony of each witness.

D. Fraud under 11 U.S.C. § 523(a)(2)(B)

Plaintiff asserts that the Judgement Debt is non-dischargeable pursuant to § 523(a)(2)(B)

because: (1) Debtor submitted the 2017 PFS and 2018 PFS in connection with the $370M Loan,

$750M Loan and Hickman Guarantee; (2) the 2017 PFS and 2018 PFS contained written

statements respecting Debtor’s financial condition that were materially false; (3) Plaintiff

reasonably relied on the material misrepresentations in the 2017 PFS and 2018 PFS in agreeing to

issue the $370M Loan and $750M Loan to Door Eagle; and (4) Debtor made the

misrepresentations in the 2017 PFS and 2018 PFS with an intent to deceive Plaintiff into issuing

the $370M Loan and $750M Loan.63 Specifically, the alleged material misrepresentations in the

59 Aug. 20, 2025 Min. Entry.

60 O’Connor v. Burg (In re Burg), 641 B.R. 120 (Bankr. S.D. Tex. 2022); In re Bigler LP, 458 B.R. 345, 367

(Bankr. S.D. Tex. 2011) (citing Port Arthur Towing Co. v. John W. Towing, Inc, 42 F.3d 312, 318 (5th Cir. 1995)).

61 Aug. 20, 2025 Courtroom Trial (Fowler testimony on direct).

62 See, e.g., In re Ali, 2015 Bankr. LEXIS 2443, 2015 WL 4611343 at *4 (Bankr. W.D. Tex. July 23, 2015)

(analyzing the clarity, completeness, and quality of witness responses in order to make credibility determinations).

63 ECF Nos. 22; 36 at 1–2.

2017 PFS and 2018 PFS, which Plaintiff alleges it relied upon, pertain to Debtor’s ownership

interest in the Waterville Property; Meadowlake Property; Kingfisher Property; and Memorial

Village Property.64

Pursuant to 11 U.S.C § 523 – Exceptions to Discharge:

(a) A discharge under section 727, 1141, 1192, 1228(a), 1228(b) or 1328 (b) of this

title does not discharge an individual debtor from any debt – (2) for money,

property, services, or an extension, renewal, or refinancing of credit, to the extent

obtained by— (B) use of a statement in writing – (i) that is materially false; (ii)

respecting the debtor’s or an insider’s financial condition; (iii) on which the creditor

to whom the debtor is liable for such money, property, services or credit reasonably

relied; and (iv) that the debtor caused to be made or published with intent to deceive

. . . .

The Court will consider whether Plaintiff has met its burden of proving, by a preponderance of the

evidence, each element of § 523(a)(2)(B).65

1. Use of a statement in writing

A statement respecting the debtor’s financial condition must be in writing to make a debt

non-dischargeable under the § 523(a)(2)(B). 66 “The debtor must have written, signed, or adopted

the writing.”67 Written statements evidencing a debtor’s financial condition may include “balance

sheets, income statements, statements of changes in overall financial position, or income and debt

statements that present the debtor or insider's net worth, overall financial health, or equation of

assets and liabilities.”68

64 ECF No. 22.

65 Country Credit, LLC v. Martin (In re Martin), 513 B.R. 303, 308 (Bankr. S.D. Miss. 2014) (“With respect . . . §

523(a)(2)(B), ‘the creditor must prove by a preponderance of the evidence that the debt is nondischargeable.’”)

(citing Recoveredge, L.P. v. Pentecost, 44 F.3d 1284, 1289 (5th Cir. 1995)).

66 11 U.S.C. § 523(a)(2)(B); Field v. Mans, 516 U.S. 59, 64 (1995).

67 Zeba, LLC v. Hosseini (In re Hosseini), Nos. 18-20177, 19-2001, 2021 Bankr. LEXIS 1319, at *23 (Bankr. S.D.

Tex. May 14, 2021).

68 Heritage Bank v. McCraken (In re McCracken), 586 B.R. 247, 255 (Bankr. S.D. Tex. 2018).

In connection with the $370M Loan, $750M Loan, and Hickman Guarantee, Debtor

submitted to Plaintiff the 2017 PFS and the 2018 PFS.69 The 2017 PFS and 2018 PFS each included

written statements setting forth Debtor’s net worth, including details of Debtor’s property

ownership of real estate, cash, and personal property.70 Both the 2017 PFS and 2018 PFS were

signed by Debtor.71 Thus, the 2017 PFS and 2018 PFS contained “statement[s] in writing . . .

respecting the debtor’s or an insider’s financial condition,” pursuant to § 523(a)(2)(B).

2. Use of a statement in writing that is materially false

Section 523(a)(2)(B)(i) requires that the written statement relied upon to incur the debt be

materially false.72 A materially false financial statement is one which “paints a substantially

untruthful picture of a financial condition by misrepresenting information of the type which would

normally affect the decision to grant credit.”73 “[M]ateriality should be judged by comparing the

debtor’s actual financial condition with the picture debtor paints of it.”74 “To be shown as

‘materially false,’ the document must not only be erroneous, but also contain information causing

the document to be substantially inaccurate.”75 “[I]t is well-established that writings with pertinent

omissions may qualify as ‘materially false’ for purposes of § 523(a)(2)(B).”76 A false statement

about a single asset can be a materially false “statement respecting the debtor’s financial

condition.”77

69 ECF Nos. 37-1; 37-2.

70 ECF Nos. 37-1; 37-2.

71 ECF Nos. 37-1; 37-2.

72 523(a)(2)(B)(i).

73 In re Jordan, 927 F.2d 221, 224 (5th Cir. 1991).

74 In re Nance, 70 B.R. 318, 321 (Bankr. N.D. Tex. 1987).

75 First Nat'l Bank of Byers, N.A. v. Slonaker (In re Slonaker), 269 B.R. 595, 603 (Bankr. N.D. Tex. 2001).

76 In re Jordan, 927 F.2d 221, 224 (5th Cir. 1991).

77 Lamar, Archer & Cofrin, LLP v. Appling, 584 U.S. 709, 712 (2018).

Plaintiff asserts that it relied on misrepresentations made in the 2017 PFS and 2018 PFS in

making its decision to extend the $370M Loan and $750M Loan to Eagle Door.78 The Court will

thus determine whether statements were made in the 2017 PFS and 2018 PFS that constituted

material misrepresentations respecting the debtor’s financial condition under § 523(a)(2)(B).

The 2017 PFS identified the following real estate property: (1) the Kingfisher Property as

Debtor’s “wholly owned” real estate valued at $580,000 with a $300,000 mortgage for a net equity

interest of $280,000; (2) the Waterville Property as Debtor’s “wholly owned” real estate valued at

$180,000 with no mortgage for a net equity interest of $180,000; and (3) the Meadowlake Property

as Debtor’s homestead valued at $600,000 with a $90,000 mortgage for a net equity interest of

$510,000.79 The real estate disclosed on the 2017 PFS is summarized in Table 1 below:

Table 1: Summary of Real Estate in 2017 PFS

Mortgage

Property Market Value amount Net equity

Kingfisher Property $580,000 $300,000 $280,000

Waterville Property $180,000 $0 $180,000

Meadowlake Property

(Homestead) $600,000 $90,000 $510,000

Total $1,360,000 $390,000 $970,000

Total excluding homestead $760,000 $300,000 $460,000

The 2018 PFS identified the following real estate: (1) the Kingfisher Property as Debtor’s

“wholly owned” property valued at $600,000 with a $300,000 mortgage for a net equity interest

of $300,000;80 (2) the Waterville Property as Debtor’s “wholly owned” real estate valued at

$175,000 with no mortgage for a net equity interest of $175,000; (3) the Meadowlake Property as

78 ECF No. 22 at 8–9.

79 ECF No. 37-2 at 3.

80 ECF No. 37-2 at 3.

Debtor’s “wholly owned” property valued at $600,000 with no mortgage for a net equity interest

of $600,000; and (4) the Memorial Village Property as Debtor’s “wholly owned” property valued

at $450,000 with a $70,000 mortgage for a net equity of $380,000.81 The real estate disclosed on

the 2018 PFS is summarized in Table 2 below:

Table 2: Summary of Real Estate in the 2018 PFS

Mortgage

Property Market Value amount Net equity

Kingfisher Property $600,000 $300,000 $300,000

Waterville Property $175,000 $0 $175,000

Meadowlake Property $600,000 $0 $600,000

Memorial Village Property $450,000 $70,000 $380,000

Total $1,825,000 $370,000 $1,455,000

Debtor, in the 2017 PFS and 2018 PFS, answered “No” to the following question: “Were

any of the Assets (i) owned or claimed by your spouse before marriage, or (ii) acquired by your

spouse during marriage by gift or inheritances, or (iii) recovered for personal injuries sustained by

your spouse during marriage, or (iv) acquired from the proceeds of liquidations of any of the

preceding?”82

Debtor transferred the Kingfisher Property to himself and Mrs. Noble as tenants in common

on August 29, 2016, which was before Debtor submitted the 2017 PFS on June 6, 2017 and the

2018 PFS on October 19, 2018.83 Thus, when Debtor represented in the 2017 PFS and 2018 PFS

that he wholly owned the Kingfisher Property, that representation was false.84 Therefore, Debtor’s

81 ECF No. 37-1 at 3.

82 ECF Nos. 37-1 at 4; 37-2 at 4.

83 ECF No. 35-17.

84 ECF Nos. 35-17; 37-1; 37-2.

representation on his 2017 PFS and 2018 PFS that he wholly owned the Kingfisher Property was

a misrepresentation respecting his financial condition under § 523(a)(2)(B).

On July 19, 2019, Debtor deeded the Waterville Property to his son, William Hickman,

III.85 Plaintiff asserts that Debtor’s representation that he owned the Waterville Property was false

because Debtor always intended to convey the property to his son and never intended it to remain

as collateral and a source for repayment of the debt owed to Plaintiff.86 However, under the plain

language of § 523(a)(2)(B), only a false statement “respecting the debtor’s or an insider’s financial

condition” can be grounds for non-discharge.87 Plaintiff has not shown that at the time Debtor

submitted the 2017 PFS and 2018 PFS, he did not in fact wholly own the Waterville Property.88

Thus, the Court finds that Debtor’s representation in the 2017 PFS and 2018 PFS that he wholly

owned the Waterville Property was not a misrepresentation respecting his financial condition

under § 523(a)(2)(B).

Debtor admitted at trial that at the time he filled out the 2017 PFS and 2018 PFS, the

Meadowlake Property was his homestead.89 Debtor indicated that the Meadowlake Property was

his homestead in the 2017 PFS but did not identify the Meadowlake Property as a homestead in

the 2018 PFS.90 The homestead status of a property affects the ability of a lender to use the property

as recovery of a loan.91 Therefore, Debtor’s representation in the 2018 PFS that he owned the

85 ECF Nos. 37-5; 37-6; 35-14 at 24; Aug. 20, 2025 Courtroom Trial (Debtor testifying).

86 ECF No. 36-1 at 10.

87 11 U.S.C. § 523(a)(2)(B)(ii).

88 See Summit Credit Union v. Goldbeck (In re Goldbeck), 590 B.R. 881, 891 (Bankr. W.D. Wis. 2018)

(“[Plaintiff’s] argument stretches the meaning of ‘financial condition’ further than even the broadest definition in

existing case law. The projected costs of construction say nothing about Defendant’s net worth or whether he owned

an asset. And the Facility was not even built and there was no asset to own. The projected balance sheet was merely

a forecast about future potential and thus not a representation of fact about financial condition.”).

89 Aug. 20, 2025 Courtroom Trial (Debtor testifying).

90 ECF Nos. 37-1; 37-2.

91 See Blodgett v. BAC Home Loans Servicing, LP, No. 4:11-cv-00051, 2012 U.S. Dist. LEXIS 1524, at *3 n.2 (E.D.

Tex. Jan. 6, 2012).

Meadowlake Property as a non-homestead property was a misrepresentation respecting his

financial condition under § 523(a)(2)(B).

The evidence shows that Debtor never owned the Memorial Village Property. At the

meeting of creditors held on July 25, 2024, Debtor maintained that he never owned the Memorial

Village Property and that it was wholly owned by Mrs. Noble at the time that Debtor submitted

his 2018 PFS.92 Debtor admitted as such at trial.93 Therefore, Debtor’s representation on his 2018

PFS that he owned the Memorial Village Property was a misrepresentation respecting his financial

condition under § 523(a)(2)(B).

A review of the 2017 PFS and 2018 PFS would lead one to believe that Debtor has

substantially more non-exempt assets than he did. As to the 2017 PFS, Debtor listed his net equity

in the Kingfisher Property at $280,000.94 Since Debtor in fact owned the Kingfisher Property as

tenants in common with Mrs. Noble, Debtor overstated his net worth in the 2017 PFS by

$140,000.95

As for the 2018 PFS, Debtor also misrepresented that he wholly owned the Kingfisher

Property, when in fact he owned it as a tenant in common with Mrs. Noble.96 He listed his net

equity in the Kingfisher Property as $300,000, thereby overstating it by $150,000.97 Next, Debtor

listed the Meadowlake Property in the 2018 PFS as his wholly owned non-homestead property

with a net equity of $600,000.98 Since the Meadowlake Property was Debtor’s homestead, Debtor

misrepresented his non-homestead equity interest in the Meadowlake Property by $600,000.99

92 ECF No. 35-14 at 22, 35.

93 Aug. 20, 2025 Courtroom Trial (Debtor testifying).

94 ECF No. 37-2.

95 ECF Nos. 37-2; 35-17.

96 ECF Nos. 37-1; 35-17.

97 ECF Nos. 37-1; 35-17.

98 ECF No. 37-1.

99 ECF No. 37-1; Aug 20. 2025 Courtroom Trial (Debtor testifying).

Finally, in his 2018 PFS, Debtor represented that he wholly owned the Memorial Village Property

and listed his net equity in the property at $380,000 when it was in fact wholly owned by Mrs.

Noble.100 Thus, Debtor overstated his net equity in the Memorial Village Property by $380,000.

In total, Debtor overstated his equity in non-homestead real estate in the 2018 PFS by $1,130,000,

which exceeds the total loan amount of the $750M Loan.

Because of Debtor’s misrepresentations regarding his true ownership interest in the real

estate listed in the 2017 PFS and 2018 PFS, Debtor presented the Plaintiff with a substantially

untruthful picture of his financial conditions. When deciding whether to loan money to a company

as the owner as a guarantor, a reasonable lender would consider whether the owner has sufficient

assets to repay the loan. Indeed, Mr. Fowler testified that a guarantor’s’ networth and ownership

of non-exempt assets are factors that Plaintiff considers when deciding whether to extend credit.101

Thus, given the Debtor’s significant overstatement of his networth and property interest in non-

exempt assets, the Court finds that Debtor’s misrepresentations in the 2017 PFS and 2018 PFS

regarding his ownership interest in the Waterville Property; Meadowlake Property; Memorial

Village Property; and Kingfisher Property were material misrepresentations for purposes of

§523(a)(2)(B).102

3. Use of a statement in writing on which creditor reasonably relied

100 ECF No. 37-1; Aug 20. 2025 Courtroom Trial (Debtor testifying).

101 See In re Jordan, 927 F.2d 221, 224 (5th Cir. 1991) (“[I]n determining whether a false statement is material, a

relevant although not dispositive inquiry is ‘whether the lender would have made the loan had he known the debtor’s

true situation.’”); Aug. 20, 2025 Courtroom trial (Mr. Fowler testifying).

102 See In re Rodriguez, 29 B.R. 537, 539 (Bankr. E.D.N.Y. 1983) (“An understatement of a debtor's liability by

approximately 25 per cent, as well as an overstatement by $12,000 of the value of real property owned by the debtor,

have both been held to be material misrepresentations sufficient to bar a discharge” under § 523(a)(2)(B).); In re

Nance, 70 B.R. 318, 322 (Bankr. N.D. Tex. 1987) (“The Courts have held that misrepresentation of ownership is a

material falsity sufficient to deny dischargeability pursuant to § 523(a)(2)(B).”).

Reliance under § 523(a)(2)(B) requires that the creditor in fact relied on a material

misrepresentation and that the reliance was reasonable.103 Even partial reliance is sufficient under

§ 523(a)(2)(B) as long as it is reasonable.104 For purposes of § 523(a)(2)(B), the reasonableness of

a creditor’s reliance is a question of fact and is evaluated in light of the totality of the

circumstances.105 The Fifth Circuit held that in determining the reasonableness of reliance, a

bankruptcy court may consider, among other things:

whether there had been previous business dealings with the debtor that gave rise to

a relationship of trust; whether there were any “red flags” that would have alerted

an ordinarily prudent lender to the possibility that the representations relied upon

were not accurate; and whether even minimal investigation would have revealed

the inaccuracy of the debtor's representations.106

Likewise, the Fifth Circuit has noted that “[w]hen courts have found a creditor did not reasonably

rely on a debtor's falsehoods, they have generally highlighted numerous red flags the creditor

willfully ignored.”107 “[T]he reasonable reliance requirement is a low hurdle for creditors to

satisfy. The requirement is primarily meant to target bad-faith creditors who ignore red flags with

the knowledge that they can later avoid the debtor’s discharge under § 523(a)(2)(B).”108

The Court will first address the misrepresentations in the 2017 PFS. Mr. Fowler testified

that, although he had reviewed the 2017 PFS, he considered it outdated when Debtor submitted

the 2018 PFS.109 Mr. Fowler testified that he relied on the financial information in the 2018 PFS,

along with Door Eagle’s prior payment history on the $370M Loan, to determine whether to

recommend that Plaintiff issue the $750M Loan to Door Eagle.110 Because Mr. Fowler

103 Field v. Mans, 516 U.S. 59, 68, 116 S. Ct. 437, 442 (1995).

104 First Nat'l Bank of Byers, N.A. v. Slonaker (In re Slonaker), 269 B.R. 595, 606 (Bankr. N.D. Tex. 2001).

105 Coston v. Bank of Malvern (In re Coston), 991 F.2d 257, 261 (5th Cir. 1993).

106 Id.

107 Veritex Cmty. Bank v. Osborne (In re Osborne), 951 F.3d 691, 699 (5th Cir. 2020).

108 Id.

109 Aug. 20, 2025 Courtroom Trial (Mr. Fowler testifying).

110 Aug. 20, 2025 Courtroom Trial (Mr. Fowler testifying).

acknowledged that the information in the 2017 PFS was outdated, the Court finds that the

misrepresentation regarding Debtor’s ownership interest in the Kingfisher Property in the 2017

PFS was not reasonably relied upon by Plaintiff in issuing the $750M Loan.

As for the $370M Loan, Mr. Fowler testified that he was not involved in the decision to

issue the $370M Loan and that he was not involved in Debtor’s or Door Eagles’s account with

Plaintiff at the time the $370M Loan was issued.111 In fact, Plaintiff presented no witnesses with

personal knowledge of how Plaintiff relied on the 2017 PFS in making its decision to issue the

$370M Loan. Thus, the Court finds that Plaintiff has not met its burden of showing that it

reasonably relied upon the misrepresentations in the 2017 PFS when it decided to issue the $370M

Loan.

With respect to the 2018 PFS, Mr. Fowler credibly testified that he relied on

misrepresentations concerning Debtor’s ownership interests in the Waterville Property,

Meadowlake Property, Memorial Village Property, and Kingfisher Property when recommending

that Plaintiff extend the $750M Loan to Door Eagle.112 He further testified that the types of false

statements contained in the 2018 PFS are the kind that would materially influence a decision to

extend credit.113 Accordingly, the Court finds that Plaintiff did, in fact, rely on material

misrepresentations in the 2018 PFS when issuing the $750M Loan. The remaining question is

whether that reliance was reasonable.

Here, the Court finds that there were multiple “red flags” that would put a reasonable

person on notice that the 2018 PFS contained inaccurate information, and that Plaintiff did not take

any actions to verify the information despite these red flags. First, the 2017 PFS identified the

111 Aug. 20, 2025 Courtroom Trial (Mr. Fowler testifying).

112 Aug. 20, 2025 Courtroom Trial (Mr. Fowler testifying).

113 Aug. 20, 2025 Courtroom Trial (Mr. Fowler testifying).

Meadowlake Property as Debtor’s homestead and listed it as his home address.114 The 2018 PFS,

filed approximately one year later, again listed the Meadowlake Property as Debtor’s home address

but reclassified it as a non-homestead property.115 Notably, the 2018 PFS did not designate any

other property as a homestead.116 Despite this change, Mr. Fowler never inquired as to why the

property listed as a homestead in the 2017 PFS was later identified as non-homestead in the 2018

PFS, despite that it remained listed as Debtor’s home address and no other property was designated

as his homestead.117 Second, the 2018 PFS listed the Memorial Village Property, which did not

appear in the 2017 PFS.118 This addition indicated that Debtor had acquired a $380,000 equity

interest in real estate within roughly one year.119 Mr. Fowler never inquired into how Debtor

obtained the funds to acquire this new asset.120 Third, the 2018 PFS, under the section that required

Debtor to list his monthly cash income and cash expenses, incorrectly listed Debtor’s cash income

on an annual basis but listed his liabilities on a monthly basis.121 Fourth, the 2017 PFS listed

$250,000 in jewelry and furniture that were omitted from the 2018 PFS.122 Mr. Fowler never

inquired into the disposition of these assets.123 Finally, the 2018 PFS listed Debtor’s ownership

interest in Door Eagle as 50%, whereas the 2017 PFS reflected a 100% ownership interest.124 Mr.

Fowler never inquired into how Debtor’s ownership interest in Door Eagle had decreased by half

within approximately one year.125

114 ECF No. 37-2.

115 ECF No. 37-1.

116 ECF No. 37-1.

117 ECF Nos. 37-1; 37-2; Aug. 20, 2025 Courtroom Trial (Mr. Fowler testifying).

118 ECF Nos. 37-1; 37-2.

119 ECF Nos. 37-1; 37-2.

120 Aug. 20, 2025 Courtroom Trial (Mr. Fowler testifying).

121 ECF No. 37-1; Aug. 20, 2025 Courtroom Trial (Mr. Fowler testifying).

122 ECF Nos. 37-2; 37-1.

123 Aug. 20, 2025 Courtroom Trial (Mr. Fowler testifying).

124 ECF Nos. 37-2; 37-1.

125 Aug. 20, 2025 Courtroom Trial (Mr. Fowler testifying).

Mr. Fowler testified that he relied on the Debtor’s signature which attested to the truth of

the information in the 2018 PFS.126 However, because of the discrepancies between the 2017 PFS

and the 2018 PFS, as well as inconsistencies within the 2018 PFS itself, the Court finds that Mr.

Fowler, acting on behalf of Plaintiff, could not have reasonably relied on the information in the

2018 PFS without conducting at least a minimal investigation into its accuracy.127 Mr. Fowler was

repeatedly asked what steps he took to verify the information in the 2018 PFS, and his testimony

shows that he did nothing.128 Specifically, no title search or UCC search was conducted to confirm

the information.129 Although Debtor’s credit report was obtained when Door Eagle applied for the

$370M Loan, no credit report was obtained at the time Door Eagle applied for the $750M Loan.130

Moreover, the credit report that was obtained was never admitted into evidence, and Mr. Fowler

offered no testimony of its contents. Thus, the Court finds that Plaintiff willfully ignored multiple

red flags suggesting that the information in the 2018 PFS may have been false. As such, the Court

finds that Plaintiff’s reliance on the misrepresentations contained in the 2018 PFS was not

reasonable.

Accordingly, the Court finds that Plaintiff did not reasonably rely on the misrepresentations

in the 2017 PFS and the 2018 PFS when it decided the issue the $370M Loan and the $750M Loan.

4. Use of a statement in writing that the debtor caused to be made with an intent to

deceive

Section 523(a)(2)(B) requires that the debtor made a false statement in writing with the

intent to deceive.131 “A judge may look at the totality of the circumstances and infer an intent to

126 Aug. 20, 2025 Courtroom Trial (Mr. Fowler testifying).

127 See Coston v. Bank of Malvern (In re Coston), 991 F.2d 257, 261 (5th Cir. 1993).

128 Aug. 20, 2025 Courtroom Trial (Mr. Fowler testifying).

129 Aug. 20, 2025 Courtroom Trial (Mr. Fowler testifying).

130 Aug. 20, 2025 Courtroom Trial (Mr. Fowler testifying).

131 11 U.S.C. § 523(a)(2)(B).

deceive when ‘[r]eckless disregard for the truth or falsity of a statement combined with the sheer

magnitude of the resultant misrepresentation may combine’ to produce such an inference.”132 An

“intent to deceive may be inferred from use of a false financial statement to obtain credit.”133 “The

court may consider such factors as the debtor's knowledge of and experience in financial matters,

as well as whether the debtor exhibited a clear pattern of purposeful conduct when inferring

deceitful intent of a debtor.”134 “[W]here a debtor testifies as to her subjective intent, the

bankruptcy court must make a credibility determination, considering the debtor's testimony, along

with other objective circumstantial evidence of the debtor’s subjective intent.”135

Debtor testified that he did not intend to make any misrepresentations respecting his

financial condition when he completed the 2017 PFS and 2018 PFS.136 However, Debtor admitted

at trial that the information he listed in the 2017 PFS and 2018 PFS regarding his ownership interest

in his real property was inaccurate.137 Debtor offered excuses for his mistakes. First, he asserted

that at the time he completed the 2017 PFS and 2018 PFS, he thought that “wholly owned” property

includes real estate that is also owned by his wife, Mrs. Noble.138 Second, Debtor testified that he

was “in a hurry” when he filled out the 2018 PFS because of his immediate need to obtain

financing.139 Third, Debtor testified that he was “confused” about the information the 2017 PFS

and 2018 PFS was requesting at the time he completed them.140

132 Morrison v. W. Builders of Amarillo, Inc. (In re Morrison), 555 F.3d 473, 482 (5th Cir. 2009).

133 In re Young, 995 F.2d 547, 549 (5th Cir. 1993).

134 Heritage Bank v. McCraken (In re McCracken), 586 B.R. 247, 259 (Bankr. S.D. Tex. 2018).

135 AT&T Universal Card Servs. v. Mercer (In re Mercer), 246 F.3d 391, 409 (5th Cir. 2001).

136 Aug. 20, 2025 Courtroom Trial (Debtor testifying).

137 Aug. 20, 2025 Courtroom Trial (Debtor testifying).

138 Aug. 20, 2025 Courtroom Trial (Debtor testifying).

139 Aug. 20, 2025 Courtroom Trial (Debtor testifying).

140 Aug. 20, 2025 Courtroom Trial (Debtor testifying).

The Court finds these excuses without merit. Debtor could have sought clarification or

assistance in completing the 2017 PFS and 2018 PFS but willfully chose not to. Debtor is an

educated businessman with a degree in architecture and has managed his own business since

2011.141 He testified that he regularly used a certified public accountant (“CPA”) to assist with his

personal and business tax returns.142 However, despite his confusion regarding the 2017 PFS and

2018 PFS, and his ability to seek assistance, Debtor admitted that he never asked his CPA or

anyone else for help in completing them.143 He also acknowledged at trial that, although he

considered the 2018 PFS an important financial document, he estimated that he spent less than two

hours completing it.144 Accordingly, the Court finds that Debtor acted in reckless disregard of the

truth or falsity of the statements contained in the 2017 PFS and 2018 PFS.145

The Court also notes a troubling pattern by Debtor. First, Debtor transferred the Waterville

Property, which he valued at $175,000, to his son for a nominal amount of $10 on July 19, 2019,

after Door Eagle received the $750M Loan on November 27, 2018.146 Then, on April 21, 2022,

Debtor and Mrs. Noble sold the Kingfisher Property, which Debtor valued in the 2018 PFS at

$600,000 for $891,000.147 None of the proceeds of the sale of the Kingfisher Property were paid

to Plaintiff despite the prior issuance of the $370M Loan Demand Letter and $750M Loan Demand

Letter, and Debtor’s awareness that he was indebted to Plaintiff under the Hickman Guarantee.148

Given Debtor’s reckless disregard for the truth of the statements in the 2017 PFS and 2018

PFS, combined with his patterns of transferring valuable real estate listed in the 2017 PFS and

141 Aug. 20, 2025 Courtroom Trial (Debtor testifying).

142 Aug. 20, 2025 Courtroom Trial (Debtor testifying).

143 Aug. 20, 2025 Courtroom Trial (Debtor testifying).

144 Aug. 20, 2025 Courtroom Trial (Debtor testifying).

145 See In re Morrison, 555 F.3d at 482.

146 ECF No. 37-5.

147 ECF Nos. 35-21; 35-14 at 33.

148 Aug. 20, 2025 Courtroom Trial (Debtor testifying).

2018 PFS, the Court finds that Debtor made misrepresentations in the 2017 PFS and 2018 PFS

with an intent to deceive Plaintiff into issuing the $370M Loan and $750M Loan.!’? Nonetheless,

Plaintiff did not meet its burden of showing that it reasonably relied on the misrepresentations in

the 2017 PFS and 2018 PFS when it decided to issue the $750M Loan and $370M Loan to Door

Eagle.

Accordingly, the Court finds that the judgement debt owed to Frost Bank by William M.

Hickman, II in the total amount of $1,235,536.98, plus interest of $310.95 per day under Section

304.002 of the Texas Finance Code, is not excepted from discharge pursuant to 11 U.S.C. §

523(a)(2)(B). Additionally, because the judgement debt owed to Frost Bank by William M.

Hickman, II in the total amount of $1,235,536.98, plus interest of $310.95 per day, is not excepted

from discharge pursuant to 11 U.S.C. § 523(a)(2)(B), Plaintiff's claim in its Complaint for

reasonable and necessary attorney fees under Tex. Civ. Prac. & Rem. Code § 38.00 is denied.

IV. CONCLUSION

A judgment consistent with this Memorandum Opinion will be entered on the docket

simultaneously herewith.

SIGNED October 10, 2025

Eduardo V. Rodrigtiez”

Chief United States Bankruptcy Judge

149 See In re Morrison, 555 F.3d at 482; In re McCracken, 586 B.R. at 259.