Trustmark Nat'l Bank v. Tegeler (In re Tegeler)

Jeff Bohm, United States Bankruptcy Judge

I. INTRODUCTION

Sandy Tegeler (" Ms. Tegeler ") and Curtis Tegeler (" Mr. Tegeler ") filed a Chapter 7 petition on November 7, 2016, thereby becoming the debtors in the main case (hereinafter, they are sometimes referred to as " the Debtors "). On February 9, 2017, Trustmark National Bank (" Trustmark ") initiated the pending adversary proceeding against the Debtors. Prior to the Debtors' filing of their Chapter 7 petition, Trustmark had extended a $230,000.00 loan to the Debtors' 100%-owned company, a debt that the Debtors had personally guaranteed. Trustmark requests this Court to enter a judgment for the amount of this unpaid loan, plus attorneys' fees and costs, as a nondischargeable debt for which the Debtors, jointly and severally, are liable under 11 U.S.C. § 523 (a)(2)(A) or, alternatively, under § 523(a)(6). 1

*606 This Court held a multi-day trial in this adversary proceeding that concluded on December 8, 2017. The Court then took the matter under advisement. On March 29, 2018, this Court held a brief hearing to announce orally on the record that it had decided to grant the relief sought by Trustmark. The Court indicated that it would eventually issue written Findings of Fact and Conclusions of Law, together with a judgment, explaining its decision. However, the Court informed the parties that it would refrain from entering its written findings and conclusions, plus the judgment, until after Trustmark had proven up its reasonable attorneys' fees and expenses. The Court instructed Trustmark's counsel to submit his fee bills to counsel for the Debtors by no later than April 6, 2018, and also instructed the Debtors' counsel to file a certificate by no later than April 20, 2018, setting forth whether the Debtors objected to the amount of the fees and expenses requested by Trustmark.

Trustmark's counsel did, in fact, timely submit his fee bills [Adv. Doc. No. 52]; and counsel for the Debtors did, in fact, timely submit a certificate objecting to a portion of the fees and expenses requested by Trustmark. [Adv. Doc. No. 53]. The Court then scheduled a hearing on this discrete dispute for May 15, 2018. However, the parties filed an agreed motion to continue the hearing, which this Court granted. [Adv. Doc. Nos. 55-56]. The hearing was actually held on May 31, 2018, and after receiving the evidence (which consisted of exhibits of Trustmark, namely the fee bills of its counsel) and listening to oral arguments of the attorneys, the Court determined that the amount of Trustmark's reasonable fees and reasonable expenses for which the Debtors are jointly and severally liable (and which amounts are nondischargeable) total $91,728.00 and $6,503.84, respectively, for a total amount of $98,231.84. 2

In the wake of this Court's holding the hearing to determine Trustmark's reasonable fees and expenses, the Court now issues these written Findings of Fact and Conclusions of Law pursuant to Rule 7052 explaining why it has decided to grant the relief requested by Trustmark and enter a judgment declaring that $371,565.88, the outstanding amount owed under the loan documents (including attorneys' fees and costs) is a nondischargeable obligation owed by the Debtors, jointly and severally. To the extent that any finding of fact is construed as a conclusion of law, it is *607 adopted as such; and to the extent that any conclusion of law is construed as a finding of fact, it is adopted as such. The Court reserves the right to make additional findings and conclusions as this Court deems appropriate or as may be requested by either of the parties.

II. FINDINGS OF FACT

A. Background of the Debtors

1. Ms. Tegeler met Mr. Tegeler in 1991, and they were married in 1994. Ms. Tegeler went to Texas A & M University-Kingsville and graduated with a bachelor's degree in human science and nutrition. She also pursued a master's degree in English, but did not graduate. [Nov. 7, 2017 Tr. 136:20-138:3].

2. Mr. Tegeler, at age thirteen, began working in a machine shop in Corpus Christi, Texas. [Oct. 25, 2017 Tr. 6:4-13]. He graduated from high school. [Oct. 25, 2017 Tr. 7:10-12]. He also attended Tyler Junior College as well as Texas A & M University-Kingsville, but did not graduate from either school. [Oct. 25, 2017 Tr. 7:10-8:3]. After college, Mr. Tegeler spent the next sixteen years working for various drill pipe manufacturers in the oil and gas industry. [Oct. 25, 2017 Tr. 8:15-11:25]. Mr. Tegeler claims he was diagnosed with dyslexia when he was in third grade. [Nov. 6, 2017 Tr. 80:11-12]. He claims that he still presently suffers from dyslexia. [Nov. 6, 2017 Tr. 84:19-20]. He also claims that he instructs Ms. Tegeler to read his e-mails to him. [Nov. 6, 2017 Tr. 84:21-25].

3. Even though he does not have a college degree, Mr. Tegeler is a sophisticated businessman; indeed, he testified that he is sophisticated and experienced. [Oct. 26, 2017 Tr. 40:11-22]. His significant sophistication and business acumen are underscored by the fact that he borrowed $2.7 million from John Lindley (" Lindley "), his business associate of thirty-five years, without the assistance of counsel. [Nov. 7, 2017 Tr. 88:8-17]. Mr. Tegeler testified that the purpose of borrowing $2.7 million from Lindley was to "buy the Stuteses out and merge in with FWM." 3 [Nov. 7, 2017 Tr. 127:7-9]. Additionally, the Asset Purchase Agreement 4 that is the subject of the suit at bar, which Mr. Tegeler signed and is subsequently described in greater detail, describes his level of sophistication as follows:

[Mr. Tegeler] is an 'accredited investor' within the meaning of Rule 501 of Regulation D [the definition of this term is found in 17 C.F.R. § 230.501 ] promulgated under the Securities Act, has knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of the transactions contemplated by this Agreement.

[Pl.'s Ex. No. 10 at 16, ¶ 4.16].

B. Background of BC Gulf Coast Machine & Supply, Inc.

4. In September 2008, Mr. Tegeler formed BC Gulf Coast Machine & Supply, Inc. (" BCGC "). [Oct. 25, 2017 Tr. 11:22-25]. In the same year, Ms. Tegeler began working for BCGC. [Nov. 7, 2017 Tr. 138:14-16]. Ms. Tegeler served as the Vice President of BCGC. [November 27, 2017 Tr. 118:24-119:7]. Her duties included:

a. Performing data entry [Nov. 7, 2017 Tr. 138:22-24];

b. Setting up BCGC's bank accounts [Nov. 7, 2017 Tr. 139:6];

*608 c. Managing BCGC's finances and documenting the transactions in QuickBooks [Nov. 7, 2017 Tr. 139:8];

d. Managing BCGC's accounts payable and accounts receivable [Nov. 7, 2017 Tr. 141:18-25];

e. Sending invoices to BCGC's clients [Nov. 7, 2017 Tr. 139:8-9];

f. Paying BCGC's operational expenses [Nov. 7, 2017 Tr. 139:5-9];

g. Answering the telephone calls [Nov. 7, 2017 Tr. 139:13-14]; and

h. Facilitating various human resource functions, including payroll [Nov. 7, 2017 Tr. 140:24-141:2].

5. In January of 2009, BCGC began its operations and engaged in the business of manufacturing, selling, and machining of drill pipe, collars, and other tubulars used in the oil and gas industry. [Oct. 26, 2017 Tr. 20:23-21:7]. BCGC's headquarters and yard were located in Spring, Texas. [Nov. 7, 2017 Tr. 122:13-17].

6. Mr. Tegeler served as the President of BCGC. [Oct. 25, 2017 Tr. 60:12-20]. His duties included:

a. Replacing damaged machinery for BCGC [Oct. 25, 2017 Tr. 12:11-13];

b. Purchasing new machinery for BCGC [Oct. 25, 2017 Tr. 15:15-20];

c. Improving the profitability of BCGC [Oct. 25, 2017 Tr. 12:10-15]; and

d. Maintaining the growth of BCGC's facilities and operations [Oct. 25, 2017 Tr. 12:18-13:13].

7. Initially, BCGC's shareholders included not only the Debtors, but also Brad Stutes (" Mr. Stutes ") and Anita Stutes (" Ms. Stutes ") (collectively, the " Stuteses "), each of whom owned a 25% interest in the company. [Nov. 7, 2017 120:14-22]. Eventually, Mr. Tegeler came to mistrust Mr. Stutes, concluding that Mr. Stutes was, among other alleged improper practices, unethically steering business away from BCGC to his own 100%-owned company in Louisiana. [Nov. 7, 2017 Tr. 121:2-11, 121:19-126:24]. Thus, Mr. Tegeler decided to buy out the 50% interest owned by the Stuteses. [ Id. ]. In order to effectuate the buyout of the 50% interest owned by Mr. and Ms. Stutes, Ms. Tegeler conveyed all of her interest in BCGC to Mr. Tegeler. [Nov. 28, 2017 Tr. 27:6-9]. Mr. Tegeler thereafter paid $2.7 million to buy out the interest held by the Stuteses. [Nov. 7, 2017 Tr. 119:12-120:22]. As a condition of this buyout, the Debtors were required to relocate BCGC's operations to another facility by the end of August 2014, as the Stuteses owned the real property in Spring, Texas, on which BCGC's headquarters and yard were located. [Nov. 7, 2017 Tr. 100:5-15]. For the Debtors, time was very much of the essence to find a new location to run BCGC's operations.

C. The Debtors Enter into Negotiations to Physically Move BCGC's Operations and Also Seek to Obtain a Line of Credit for BCGC

8. Having obtained 100% ownership of BCGC, and knowing that he had to quickly and physically move BCGC's operations and assets to a different location, Mr. Tegeler began negotiations with David Rayne (" Rayne "), the CFO of FWM Tubular & Equipment Corporation (" FWM "), and William Huebel (" Huebel "), FWM's 100% owner. [Nov. 7, 2017 Tr. 31:13-15; Oct. 24. 2017 Tr. 115:8-18]. FWM's business, which was located in Cleveland, Texas, was similar to BCGC's business. [Oct. 25, 2017 Tr. 14:4-16, 33:4-5]. Mr. Tegeler believed that it was in BCGC's best interest to explore merging with FWM; indeed, FWM had a much larger operational yard-twenty-five acres-in Cleveland, Texas, that could accommodate BCGC's equipment and allow for much greater growth than otherwise *609 would be the case. [Oct. 25, 2017 Tr. 14:13-15:22].

9. After holding initial discussions with Huebel in July 2014, Mr. Tegeler concluded that if BCGC was going to merge with FWM, BCGC first needed to obtain a line of credit. [Oct. 25, 2017 Tr. 18:9-14]; indeed, Huebel emphasized to Mr. Tegeler that as a condition precedent for FWM to enter into any transaction with BCGC, the latter had to first procure a line of credit facility. [Nov. 7, 2017 Tr. 93:10-12]. Moreover, Mr. Tegeler concluded that he needed to move quickly if any agreement was going to be achieved with FWM. [Oct. 25, 2017 Tr. 18:24-19:3]. Given these circumstances, and given the fact that the line of credit and the merger itself would require documentation, Mr. Tegeler decided to retain both an attorney and an accountant to help negotiate and document these transactions. [Oct. 23, 2017 Tr. 19:3-5].

10. On behalf of BCGC, Mr. Tegeler retained Jared LeBlanc (" LeBlanc ") of Welsh LeBlanc LLP to represent the company in negotiating and documenting whatever transaction between BCGC and FWM could best achieve BCGC's objectives. [Oct. 26, 2017 Tr. 17:20-18:3].

11. Additionally, on behalf of BCGC, Mr. Tegeler retained Bob Stephens (" Stephens "), a certified public accountant whom he had known for several years. [Oct. 27, 2017 Tr. 24:6-24].

a. Stephens is employed by Kimes, Stephens & Co. [ Id. ].

b. Stephens prepared the Debtors' personal tax returns for several years. [Nov. 27, 2017 Tr. 57:17-19].

c. Stephens was also the outside corporate accountant for BCGC for many years. [Oct. 25, 2017 Tr. 16:18-17:2]. He was responsible for filing the company's tax returns as well as addressing general accounting inquiries. [Oct. 25, 2017 Tr. 17:6-9].

d. Stephens played two roles in his representation of the Debtors. First, with respect to the BCGC-FWM transaction, Stephens stated that his "role was to help facilitate document preparation for the attorneys involved [i.e., LeBlanc (as counsel for BCGC) and Dinerstein (as counsel for FWM) ], provide documents as requested, and generally just be available to help facilitate whatever the attorneys needed." [Oct. 26, 2017 Tr. 88:24-89:4]. Second, he not only introduced the Tegelers to Trustmark, but also assisted the Tegelers in the loan application process for BCGC to obtain financing from Trustmark. [Oct. 25, 2017 Tr. 18:12-18]. To a large extent, he was the liaison between the Tegelers and Trustmark. [Oct. 25, 2017 Tr. 22:16-23:1]. Stephens sent two invoices to the Debtors for the services that he rendered on their behalf and on BCGC's behalf. His invoice of July 29, 2014, was for $21,000.00, and contains the following description of his services: "In connection with meetings, e-mails, correspondence, financials, etc. for negotiation and completion of acquisition. 85 hours@ $300/hr." [Court Ex. No. 1]. And, his invoice of $8,600.00 to BCGC dated September 4, 2014, contains the following description of his services: "In connection with meetings, calls, correspondence with client and bank, document review, and related matters regarding negotiation and completion of 2nd transaction. 34.5 hours x $250/hr." [ Id. ]. Thus, the total amount of Stephens' billings was $29,600.00.

*610 e. Over the course of five years, Stephens has referred three of his clients in need of financing to Trustmark-specifically, to Christy Petrilla (" Petrilla ") who is an officer at Trustmark. [Oct. 23, 2017 Tr. 64:13-18; Oct. 24, 2017 Tr. 28:7-19].

f. Stephens himself had a business line of credit with Trustmark. [Oct. 24, 2017 Tr. 27:16-28:3].

g. Over the course of five years, Trustmark has hired Stephens' 100%-owned company to perform two or three field audits for Trustmark, including collateral field exams. [Oct. 24, 2017 Tr. 29:4-30:3; Oct. 26, 2017 Tr. 75:13-76:8]. Specifically, his company reviewed accounts receivable and inspected inventory, and then provided Trustmark with a professional report of its findings. [ Id. ].

12. BCGC initially applied to Chase Bank for a line of credit. [Oct. 25, 2017 Tr. 18:19-21]. However, Chase Bank informed Mr. Tegeler that at least four to five weeks would be required for such approval to be given. [Oct. 25, 2017 Tr. 18:24-19:3]. During Mr. Tegeler's testimony, he indicated that this was too much time and he worried that BCGC would lose whatever opportunity that it had with FWM. [ Id. ].

13. The Debtors then met with Trustmark to discuss obtaining a line of credit for BCGC. [Oct. 24, 2017 Tr. 102:19-103:4]. Specifically, in late July 2014, Mr. and Ms. Tegeler, together with Stephens, met with Petrilla, the loan officer of Trustmark to whom Stephens had previously referred other clients of his who needed financing. [ Id. ].

a. From August 2014 to Spring 2015, Petrilla was the VP Commercial Lender at Trustmark. [Oct. 24, 2017 Tr. 90:6-15]. She has been employed by Trustmark for ten years. [Oct. 24, 2017 Tr. 90:10-91:12].

b. As a VP Commercial Lender, Petrilla was responsible for managing two commercial loan officers, Wayne Johnson (" Johnson "), a junior lending officer at Trustmark, and Jonathan Miller (" Miller "), a relationship manager. [Oct. 24, 2017 Tr. 92:3-93:13]. Petrilla, Johnson, and Miller, as Trustmark's loan officers, were responsible for conducting due diligence and underwriting. [Oct. 24, 2017 Tr. 96:5-6]. Specifically, this means that these loan officers must gather financial information for all prospective borrowers and guarantors for the loan application because Trustmark relies on this information to evaluate the credit risks and qualify their prospective borrower. [Oct. 24, 2017 Tr. 96:5-17]. Furthermore, Trustmark requires its prospective borrowers to submit accurate borrowing base certificates to accurately reflect a prospective borrower's accounts receivable and other assets, upon which Trustmark relies to advance funds under any approved credit facility. [Oct. 24, 2017 Tr. 181:4-14]

c. Petrilla's duties included assisting Johnson and Miller with writing loan packages and obtaining approvals for commercial loans. [ Id. ].

d. At their initial meeting with Petrilla, the Debtors represented to her that the purpose of the line of credit was to help fund BCGC's relocation, restructure of operations, general working capital, and operating expenses. [Oct. 23, 2017 Tr. 29:6-9; Oct. 24, 2017 Tr. 7:3-13]. The Debtors never told Petrilla that they were presently planning to transfer all of BCGC's assets to Mr. Tegeler or FWM immediately after *611 the loan closing. [Oct. 26, 2017 Tr. 33:7-9; Oct. 24, 2017 Tr. 112:17-19]. 5

e. At this meeting in late July of 2014, after listening to the Debtors, Petrilla, on behalf of Trustmark, decided to explore providing financing to BCGC. [Oct. 24, 2017 Tr. 93:25-94:19]. In order to extend credit to a prospective borrower, Trustmark required Petrilla to perform the following steps: (1) gather financial information from the prospective borrower and guarantors; (2) subject the requested loan to the underwriting process; (3) obtain approval for the loan; (4) obtain signatures from the borrower and guarantors on the documents memorializing the terms and conditions of the loan; and (5) book the loan in the system. [Oct. 24, 2017 Tr. 95:6-96:9]. Petrilla explained these steps to Mr. and Ms. Tegeler and Stephens at their initial meeting.

14. On August 4, 2014, Mr. and Ms. Tegeler, with assistance from Stephens, provided the requisite information about BCGC and themselves (as prospective guarantors of the loan) to Trustmark in support of BCGC's application to procure a line of credit. [Oct. 25, 2017 Tr. 42:4-45:12]. Among other documents that the Debtors gave to Petrilla was a completed loan application generated by Trustmark's loan application software that she had given to them at the initial meeting. 6 Petrilla relied upon the information that the Debtors provided to her in order to assess the loan request, obtain approval within the bank, and then have the loan documents drafted. [Oct. 24, 2017 Tr. 96:10-22, 181:9-14].

15. Meanwhile, the negotiations between BCGC and FWM continued during the first few weeks of August of 2014. [Oct. 26, 2017 Tr. 23:15-22]. BCGC's representatives in these negotiations were LeBlanc and Stephens. [Oct. 26, 2017 Tr. 17:22-18:3]. FWM's representatives were its two attorneys, Jeff Dinerstein (" Dinerstein ") and Jordan Bethea (" Bethea "), of the law firm of Jones Day. [Oct. 23, 2017 Tr. 19:2-3]. Both Mr. Tegeler (BCGC's principal) and Huebel (FWM's principal) were kept abreast of the negotiations via e-mail and verbal communications. [Pl.'s Ex. No. 10 at 36-47]. Ms. Tegeler was also copied on these e-mails and, from time to time, gave input. [Pl.'s Ex. Nos. 12-13]. No disclosure of these discussions was ever made to Trustmark, which was considering BCGC's *612 request for a line of credit during this time.

16. The written and oral communications between BCGC and FWM unequivocally reflect that the transaction between these two entities contemplated that FWM would purchase all of BCGC's assets and that Mr. Tegeler would receive 50% of the shares of stock of FWM in exchange for the conveyance of BCGC's assets to FWM, plus $450,000.00 in cash. [Oct. 25, 2017 Tr. 35:2-8]. There was no discussion at all of a merger of these two companies. Examples of these communications are as follows:

E-mail Exchanges on August 1, 2014

a. On August 1, 2014, at 5:22 P.M., Rayne sent an e-mail to Mr. Tegeler and Stephens (and a copy to Huebel) and attached a draft of a document entitled "Asset Purchase Agreement." 7 [Pl.'s Ex. No. 10 at 36].

b. On August 1, 2014, at 5:32 P.M., Stephens responded to the e-mail stating, "As we discussed on the call today, my understanding is that Jeff [Dinerstein] will also be preparing a Shareholder Agreement and will forward that when it is ready, and that he will be sending us a copy of the current Operating Agreement/Bylaws when he is able to retrieve them (from Dallas I believe he mentioned). Let me know if there is a change regarding this." 8 [Pl.'s Ex. No. 10 at 36].

c. On August 1, 2014, at 5:59 P.M., Rayne replied to Stephens stating, "You are correct. We are completing the shareholder agreement now." [Pl.'s Ex. No. 10 at 37].

E-mail Exchanges on August 2, 2014

d. On August 2, 2014, at 10:01 A.M., Rayne sent an e-mail to Mr. Tegeler and Stephens (and copied Huebel) and attached a draft of the document entitled "Shareholder Agreement." [Pl.'s Ex. No. 10 at 40]. Stephens confirmed receipt of this draft. [ Id. ].

E-mail Exchanges on August 4, 2014

e. On August 4, 2014, at 12:20 P.M., Stephens made the following comments and also posed a question: "David [Rayne], regarding our call last week and Jeff Dinerstein's request for a waiver letter on the default provision (on the sale of the business assets) of a debt covenant that BC Gulf Coast will have with Frost Bank and the bank that will be doing the line of credit, can you contact Jeff [Dinerstein] and ask him if he has a template that he would like the bank to use? Frost has requested something to use, and I suspect the other bank would like to have something to work from as well ." [Pl.'s Ex. No. 10 at 41] 9 (emphasis added).

*613 f. On August 4, 2014, at 12:37 P.M., Rayne forwarded a response from Dinerstein to Rayne (and copied Huebel, Stephens, and Bethea) to address Stephens' inquiry. Specifically, Dinerstein said, "We do not have a form of waiver. We would have to prepare something specific for this deal. Is this something that you want us to do?" [Pl.'s Ex. No. 10 at 42-43].

g. On August 4, 2014, at 12:38 P.M., Dinerstein e-mailed Rayne (and copied Huebel, Stephens, and Mr. Tegeler), stating that he will call Rayne to provide him with his professional opinion concerning the need for a waiver from Trustmark. [Pl.'s Ex. No. 10 at 43].

h. On August 4, 2014, at 1:00 P.M., Rayne replied to Dinerstein (and copied Huebel, Stephens, Mr. Tegeler, and Bethea) stating, "Bob [Stephens], I think it is typical for the Bank to have a standard covenant waiver form. Waiving covenant defaults is a fairly typical action the banks provide for loan holders when circumstances warrant the waiver." [Pl.'s Ex. No. 10 at 44].

i. On August 4, 2014, at 2:25 P.M., Stephens replied to Rayne and Dinerstein (and copied Huebel, Mr. Tegeler, and Bethea) stating, "David, I work with a lot of banks and understand that banks will either offer a forbearance agreement, or offer some form of waiver. In this case, the bank asked me to ask if your attorney had something specific he would like used. I will tell them no." 10 [Pl.'s Ex. No. 10 at 44-45].

j. On August 4, 2014, at 2:45 P.M., Dinerstein replied to Stephens (and copied Huebel, Mr. Tegeler, Rayne, and Bethea) stating, "Nothing specific. We just wanted to make sure the facilities allow for this transaction, waive any defaults caused by the closing of the transaction and allow for an orderly assignment of the credit facility, if applicable, to FWM." [Pl.'s Ex. No. 10 at 45].

E-mail Exchanges on August 7, 2014

k. On August 7, 2014, at 1:28 P.M., Ms. Tegeler e-mailed Stephens stating, "Good afternoon. Evidently, the attorney for FWM wants us to verify with our other lien holders [sic] that we are merging with another company and to make sure that they are not going to make our loans Due Immediately. I am wondering if that is not going to just raise red flags. What are your thoughts?" [Pl.'s Ex. No. 12 at 8].

l. On August 7, 2014, at 3:34 P.M., Stephens replied to Ms. Tegeler stating, "Hi Sandy, just got back to the office and also got a call from Curtis. We spoke and I agree." [Pl.'s Ex. No. 12 at 8].

m. On August 7, 2014, at 3:35 P.M., Ms. Tegeler replied to Stephens *614 stating, "OK. Think there is a way to appease the other side?" [Pl.'s Ex. No. 12 at 9].

n. On August 7, 2014, at 3:40 P.M., Stephens replied to Ms. Tegeler stating, "Honestly, it's Jeff [Dinerstein, FWM's attorney], not David [Rayne] and Bill [Huebel] in my opinion. And no, if it's up to Jeff, all steps and actions would be completed before a deal is done." [Pl.'s Ex. No. 12 at 11].

D. Loan Documents Between BCGC and Trustmark Delivered to the Debtors on August 12, 2014

17. While the negotiations between BCGC and FWM continued to proceed during the first few weeks of August 2014, Trustmark internally approved BCGC's request for a line of credit. [Pl.'s Ex. No. 1 at 7-8]. On August 12, 2014, Trustmark therefore sent the requisite loan documents to Mr. and Ms. Tegeler to review in order to ensure that they understood the terms and conditions of the loan. [Finding of Fact No. 13(e) ]. Although the loan documents were dated August 12, 2014, the Debtors actually signed the documents at Trustmark's office at the loan closing on August 18, 2014. [Oct. 24, 2017 Tr. 101:24-102:15; Nov. 6, 2017 Tr. 31:23-32:1; Nov. 7, 2017 Tr. 92:20-25]. Accordingly, the Debtors-between the date they received the loan documents on August 12, 2014, and the date of the loan closing held on August 18, 2014-had plenty of time to review the documents. Meanwhile, during this time period, the Debtors were firming up their transaction with BCGC and FWM. They did not, however, disclose this transaction-or any communication about this transaction-to Trustmark; nor did Stephens or LeBlanc.

18. The promissory note (the " Note ") that Trustmark delivered to the Debtors on August 12, 2014, reflected that Trustmark had decided to provide BCGC with a line of credit up to the principal amount of $300,000.00. [Pl.'s Ex. No. 1 at 7].

19. The revolving loan agreement delivered to the Debtors on August 12, 2014 (the " Revolving Loan Agreement ") contains language that is highly relevant to the suit at bar.

a. Paragraph 11(b) of the Revolving Loan Agreement contains representations and warranties by BCGC, which provide, "[BCGC] represents and warrants to [Trustmark] that ... [n]one of the accounts or inventory forming the basis of the collateral securing [BCGC's] indebtedness to [Trustmark] is or will be subject to any other superior liens, security interests or other encumbrance[s]." [Pl.'s Ex. No. 2 at 11, ¶ 11(b) ].

b. Paragraph 12(g) of the Revolving Loan Agreement contains an affirmative covenant, which provides, "So long as all or any portion of the indebtedness to [Trustmark] remains unpaid, [BCGC] will ... [i]nsure no material change in the current ownership of the business, in the personnel controlling operations, and in the active management of the company or its successors or assigns." [Pl.'s Ex. No. 2 at 11-12, ¶ 12(g) ].

c. Paragraph 12(i) of the Revolving Loan Agreement contains an affirmative covenant, which provides:

So long as all or any portion of the indebtedness to [Trustmark] remains unpaid, [BCGC] will ... [p]romptly notify [Trustmark] of all material adverse changes in [BCGC's] financial condition, and all existing and threatened litigation, claims, investigations, administrative *615 proceedings or similar actions which could materially affect the financial condition of [BCGC] or Guarantor.

[Pl.'s Ex. No. 2 at 11-12, ¶ 12(i) ].

d. Paragraph 14 of the Revolving Loan Agreement contains negative covenants, which provide:

Until the Note and all other obligations and liabilities of [BCGC] to [Trustmark] are fully paid, [BCGC] covenants that it will not, without the prior written consent of [Trustmark]:

a. Reorganize, merge or consolidate with, or acquire all or substantially all of the assets of any other company, firm or association, or make any other substantial change in its capitalization or character of its business;

b. Purchase or redeem any of its stock;

c. Sell the majority of its assets used or useful in its business, except in the ordinary course of business.

[Pl.'s Ex. No. 2 at 13, ¶ 14].

e. Paragraph 16 of the Revolving Loan Agreement contains an integration clause, which provides:

THIS LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES .

[Pl.'s Ex. No. 2 at 14, ¶ 16].

20. In addition to the Note and the Revolving Loan Agreement, Trustmark also delivered to the Debtors a Commercial Security Agreement (the " Security Agreement ") on August 12, 2014.

a. To secure the Note, BCGC pledged to Trustmark a first priority security interest in all of BCGC's present and future inventory, accounts, chattel paper, contract rights, and general intangibles (the " Collateral "), wherever located, whether presently owned or thereafter acquired, whether presently existing or thereafter arising. [Pl.'s Ex. No. 3 at 16].

b. The Collateral was used to "secure the Indebtedness [i.e., $300,000 principal]." [ Id. ].

c. BCGC represented and promised that it "shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral" or "pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance, or other charge, other than the security interest provided for in the Security Agreement." [Pl.'s Ex. No. 3 at 16-17].

d. Finally, much like the Revolving Loan Agreement, the Security Agreement also contains an integration clause, which provides:

This agreement, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alternation or amendment.

[Pl.'s Ex. No. 3 at 18].

*616 21. On August 12, 2014, Trustmark also delivered to the Debtors a commercial guaranty that each of them would have to sign in order for Trustmark to extend financing to BCGC (the " Guaranties ").

a. The Guaranties make it clear that by signing these documents, the Debtors would be "absolutely and unconditionally guarantee[ing] full and punctual payment and satisfaction of the Indebtedness of [BCGC] to [Trustmark], and the performance and discharge of all [BCGC's] obligations under the Note and Related Documents." [Pl.'s Ex. No. 5 at 23; Pl.'s Ex. No. 6 at 26].

b. The Guaranties also contain representations and warranties from the Debtors that they have "established adequate means of obtaining from [BCGC] on a continuing basis information regarding [BCGC's] financial condition." [Pl.'s Ex. No. 5 at 23; Pl.'s Ex. No. 6 at 26]. The Guaranties expressly require the Debtors to keep Trustmark "adequately informed from such means of any facts, events, or circumstances which might in any way affect [the Debtors'] risks under [these Guaranties]." [ Id. ].

E. Loan Closing at Trustmark's Offices on August 18, 2014

22. On August 18, 2014, the formal loan closing took place at Trustmark's offices. In attendance at this meeting were the following: Mr. Tegeler, Ms. Tegeler, Stephens, and Petrilla. [Oct. 24, 2017 Tr. 103:13-15; Nov. 6, 2017 Tr. 31:23-32:1]. Mr. Tegeler, in his capacity as BCGC's President, and Ms. Tegeler, in her capacity as BCGC's Vice President, signed the Note, the Revolving Loan Agreement, and the Security Agreement. [Pl.'s Ex. Nos. 1-3]. Additionally, Mr. Tegeler and Ms. Tegeler, in their individual capacities, also signed the Guaranties at this loan closing (hereinafter, the Note, the Revolving Loan Agreement, the Security Agreement, and the Guaranties are collectively referred to as the " Loan Documents "). [Pl.'s Ex. No. 5 at 23; Pl.'s Ex. No. 6 at 26]. Although this loan closing was held on August 18, 2014, and although Mr. Tegeler and Ms. Tegeler signed the Loan Documents on this date, the Loan Documents were actually dated August 12, 2014 (i.e., the date that Trustmark had first delivered the Loan Documents to the Debtors so that they would have sufficient time to review them). [Oct. 24, 2017 Tr. 101:24-102:15; Nov. 6, 2017 31:23-32:1; Nov. 7, 2017 Tr. 92:20-25].

23. When the loan closing took place at Trustmark's offices, neither Mr. Tegeler nor Ms. Tegeler nor Stephens informed Petrilla about any negotiations that they had recently been conducting with FWM, including the exchange of drafts of the Asset Purchase Agreement and Shareholder Agreement that would, within a few days, be executed. Moreover, at this loan closing, Petrilla testified that none of the parties requested a waiver of any provision of the Loan Documents. [Oct. 24, 2017 Tr. 104:11-19]. Indeed, the Debtors admitted at trial that they did not request a waiver of any provision of the Loan Documents. [Oct. 26, 2017 Tr. 50:22-51:5; Nov. 6, 2017 Tr. 33:20-35:15].

F. Key E-mail Exchanges of August 19, 2014

24. On August 19, 2014-the day after the loan closing-the Debtors, Stephens, and LeBlanc (BCGC's attorney) continued to be involved in the negotiations with FWM's principal (Huebel) and FWM's attorneys regarding the material terms of the Asset Purchase Agreement-which was still in draft form, not yet executed. 11

*617 It was on this day that Mr. Tegeler (on behalf of both BCGC and himself), Stephens, and Huebel (on behalf of FWM) agreed to delete the condition precedent requiring either party to obtain a waiver of events of default relating to the Loan Documents. [Nov. 6, 2017 Tr. 42:4-46:22; Pl.'s Ex. No. 13 at 1-7].

i. At 12:46 P.M., Stephens e-mailed Rayne (and copied Mr. Tegeler and Huebel) stating, in part, that "Both Frost and Trustmark are aware of the transaction and have instructed us that they have no problem rolling these loans to the new entity, without having to execute new note agreements. They will simply require an amendment to name FWM as the maker. However, I do not believe we are going to get the banks attorney's [sic] to agree to prepare waivers. I recommend that this be removed from the requirements ... Alan Stroud is working on the BC Gulf Coast asset distribution docs." 12 [Pl.'s Ex. No. 13 at 5].

ii. The Court finds that Stephens misled Rayne. His statement that Trustmark is "aware of the transaction" and that it had no problem "rolling these loans to the new entity, without having to execute new note agreements" is a complete fabrication. In fact, based upon the credible testimony of Petrilla and the other loan officers of Trustmark who testified at trial, Trustmark was not aware of "the transaction."

iii. Because Stephens copied Mr. Tegeler on his e-mail to Rayne, Mr. Tegeler knew that Stephens was misleading Rayne because Mr. Tegeler, like Stephens, knew full well that Trustmark was not aware of "the transaction" and had never stated that it had no problem switching out its borrowers so as to replace BCGC with FWM.

25. At 1:42 P.M., LeBlanc (BCGC's attorney) e-mailed revisions of the Asset Purchase Agreement to Bethea (FWM's attorney), Stephens, Huebel, Rayne, and Jennifer Mailhes 13 (and copied Dinerstein), stating, in part, "6.1(g): Delivery of Frost and Trustmark waivers: It's my understanding that the parties have agreed to waive this particular requirement, so I replaced the language with 'Intentionally Deleted.' " [Pl.'s Ex. No. 13 at 1-2].

i. The deleted text of Section 6.1(g) stated, "Waivers from each of [Frost] and Trustmark with respect to any breach or other default by Seller or BC Gulf Coast under the [Frost line of credit] or the Seller LOC [i.e., the line of credit facility provided by Trustmark to BCGC], respectively, that may occur thereunder in connection with or as a result of consummation of the transactions contemplated by this Agreement." Under this deleted text contained the phrase "INTENTIONALLY DELETED."

ii. While BCGC's attorney (i.e. LeBlanc) may have concluded that BCGC and FWM had agreed to waive this requirement FWM's attorney (Dinerstein) had not so concluded. At 7:24 P.M., he sent an e-mail *618 to Rayne (copying Dinerstein, but not Stephens or Mr. Tegeler) stating that with respect to any waivers from Trustmark and Frost, "we understand that the requirement for these has not been waived. Curtis (i.e., Mr. Tegeler) to provide. Frost has agreed to provide written wavier [sic] and Trust Mark [sic] has provided verbal assurances. Curtis is calling Trustmark first thing in the morning and requesting a written document." This Court wants to make it eminently clear that the credible evidence shows that Trustmark was not in any way involved in this decision, as Trustmark had no knowledge whatsoever that BCGC was negotiating with FWM; nor had anyone asked Trustmark for a waiver of any event of defaults concerning the Loan Documents.

iii. At 8:54 P.M., Rayne forwarded LeBlanc's e-mail to Stephens and Mr. Tegeler, so there is no question that these two individuals knew that FWM and its counsel expected Mr. Tegeler to call Trustmark on the morning of August 20, 2014, to obtain a waiver regarding the transfer of BCGC's assets to FWM. The Court finds that Mr. Tegeler never called Trustmark on the morning of August 20, 2014, requesting such a waiver; indeed, at no time did Mr. Tegeler ever request such a waiver. Nor did FWM continue to insist that he do so as a condition to going forward with effectuating the transaction that the two entities had been negotiating. Indeed, the comment made by Stephens to Ms. Tegeler in his August 7, 2014, e-mail-i.e., that it was only FWM's attorney, not FWM's principal (Huebel) or officer (Rayne) who was really focused on BCGC obtaining a waiver from Trustmark [Finding of Fact No. 16(n) ]-turned out to be true. When push came to shove, FWM's attorney (Dinerstein) backed off from this request.

G. Conveyance of All of BCGC's Assets to Mr. Tegeler on August 20, 2014

26. On August 20, 2014-two days after the loan closing-Mr. Tegeler executed a document entitled Blanket Conveyance, Bill of Sale, and Assignment (the " Conveyance ") and conveyed, transferred, and sold 100% of BCGC's assets to himself personally. [Pl.'s Ex. No. 10 at 28]. The Conveyance specifically provided that "the officers of [BCGC] have been directed to distribute all of the assets of [BCGC] to [Mr. Tegeler] in complete liquidation and cancellation of the issued and outstanding stock of [BCGC]." [ Id. ]. Mr. Tegeler signed and executed the Conveyance in his capacities as the President and sole shareholder of BCGC. [ Id. ]. The assets that BCGC conveyed to Mr. Tegeler included all of the Collateral. Mr. Tegeler gave no consideration to BCGC in exchange for BCGC conveying all of its assets to him. [Nov. 27, 2017 Tr. 131:6-132:8]. Mr. Tegeler did not obtain written consent from Trustmark before or after transferring all of BCGC's assets (including the Collateral) to himself personally. [Oct. 26, 2017 Tr. 42:19-43:4]. Indeed, Mr. Tegeler admitted that he did not contact Trustmark to request the bank's consent in writing, despite an e-mail from Bethea to Rayne dated August 19, 2014, reciting, "Waivers for Frost and Trustmark-we understand the requirement for these has not been waived. [Mr. Tegeler] to provide. Frost has agreed to provide written wavier [sic] and Trust Mark [sic] has provided verbal assurances. [Mr. Tegeler] is calling Trustmark ... and requesting a written document." [Pl.'s Ex.

*619 No. 13 at 7]. Finally, the Debtors never provided Trustmark with a copy of the Conveyance.

H. Conveyance of Assets from Mr. Tegeler to FWM on August 21, 2014

27. On August 21, 2014-three days after the loan closing and one day after Mr. Tegeler had BCGC convey all of the company's assets to himself-Mr. Tegeler proceeded to sell all of the assets that he had acquired the previous day from BCGC. [Pl.'s Ex. No. 10 at 13-39]. Specifically, Mr. Tegeler (as the sole shareholder of BCGC), Huebel Ranch & Investments, LLC (" Huebel Ranch "), and Huebel executed a document entitled "Asset Purchase Agreement" to convey, transfer, and sell the Purchased Assets (as that term is defined in the document) to FWM (the " Asset Purchase Agreement "). [ Id. ]. Paragraph 1.1 of the Asset Purchase Agreement described the Purchased Assets as the

rights, title and interest in and to substantially all of the assets, properties and rights owned or held by or on behalf of [Mr. Tegeler], of every nature and description, both tangible and intangible, real or personal, wherever such assets are situated, whether or not reflected on the books and records of [Mr. Tegeler] (or on the books and records of [BCGC] prior to the distribution of such assets, properties and rights to [Mr. Tegeler] ) ....

[Pl.'s Ex. No. 10 at 13, ¶ 1.1]. In addition to transferring title of the Purchased Assets to FWM, Mr. Tegeler also paid cash to FWM in the amount of $450,000.00. [Oct. 25, 2017 Tr. 35:2-8].

28. Pursuant to Section 1.6 of the Asset Purchase Agreement, the consideration that Mr. Tegeler received for conveying BCGC's assets, and also paying $450,000.00, to FWM was 500 shares of FWM, which represented a 50% ownership interest in FWM. 14 [Pl.'s Ex. No. 10 at 16, ¶ 1.6]. Meanwhile, BCGC received no consideration. The Asset Purchase Agreement recites, in part:

On August 20, 2014, [Mr. Tegeler] caused [BCGC] to distribute substantially all of the assets of [BCGC] to [Mr. Tegeler]. [Mr. Tegeler] desires to sell the Purchased Assets ... to [FWM]. [Mr. Tegeler] has agreed to sell and assign to [FWM], and [FWM] has agreed to purchase and take, the Purchased Assets from [Mr. Tegeler] free and clear of all Liens, except the Permitted Liens.

[Pl.'s Ex. No. 10 at 13]. According to Schedule 1.1 of the Asset Purchase Agreement, the Permitted Liens include: (1) Liens on the Purchased Assets pursuant to [Mr. Tegeler's] line of credit with Frost Bank; and (2) Liens on the Purchased Assets pursuant to [Mr. Tegeler's] line of credit with Trustmark Bank. [Pl.'s Ex. No. 10 at 9].

29. Yet, paragraph 1.3 of the Asset Purchase Agreement recites, "On the terms and subject to the conditions set forth in this Agreement, on the date hereof, [FWM] will assume only those Liabilities of [Mr. Tegeler]." [Pl.'s Ex. No. 10 at 15, ¶ 1.3(a) ]. The Assumed Liabilities include the "Seller LOC," which is described in Section 4.18 as an "unsecured, uncollateralized, non-guaranteed line of credit from Trustmark." [Pl.'s Ex. No. 10 at 28, ¶ 4.18]. Thus, this particular paragraph of the Asset Purchase Agreement contradicts Schedule 1.1 of this document, as Section *620 1.3 sets forth that Trustmark's line of credit is an unsecured loan.

30. Mr. Tegeler testified that he did not read the Asset Purchase Agreement before signing it. [Nov. 7, 2017 Tr. 86:16-87:9].

31. Mr. Tegeler admitted that the line of credit provided by Trustmark for BCGC benefitted FWM. [Nov. 7, 2017 Tr. 93:4-6]. He also admitted that he needed to procure the line of credit for BCGC as a condition for closing the Asset Purchase Agreement with FWM. [Nov. 7, 2017 Tr. 93:10-12].

32. On the date that Mr. Tegeler executed the Asset Purchase Agreement, neither Mr. Tegeler, Ms. Tegeler, nor Stephens ever provided Trustmark with a copy of the Asset Purchase Agreement. [Oct. 26, 2017 Tr. 39:20-40:8, 152:3-18; Nov. 6, 2017 Tr. 71:4-18]. 15 Furthermore, the Debtors and Stephens made no verbal disclosure to Trustmark about the Conveyance or the Asset Purchase Agreement. [Oct. 24, 2017 Tr. 111:10-113:1]. Thus, Trustmark was not aware of the Asset Purchase Agreement-either by written or verbal communication. Moreover, Trustmark never granted or provided a written waiver of any of the terms contained in any of the Loan Documents, including the requirement that any sale of BCGC's assets be approved in advance by Trustmark in writing. [Oct. 26, 2017 Tr. 57:2-58:23; Oct. 23, 2017 Tr. 62:2-10; Nov. 6, 2017 Tr. 34:22-35:15].

I. Relevant Events Occurring After August 21, 2014

33. At some point after the loan closing of August 18, 2014, occurred, Trustmark discovered that it did not have in its file a signed loan application from BCGC. [Oct. 24, 2017 Tr. 6:4-13, 12:14-15:5]. Therefore, Trustmark sent to the Debtors the completed but unsigned loan application and requested them to sign this document and return it to Trustmark. [Oct. 24, 2017 Tr. 14:10-15:5]. On August 29, 2014, the Debtors returned to Trustmark the signed loan application on behalf of BCGC. [Pl.'s Ex. No. 13 at 8-14]. The loan application inquired, "Is the collateral being pledged owned by someone other than the business or the owners of the business?" [Pl.'s Ex. No. 13 at 9]. In their response to this inquiry, the Debtors stated, "no." [ Id. ]. Yet, by this time-August 29, 2014-FWM owned the Collateral, as BCGC had conveyed the Collateral to Mr. Tegeler on August 20, 2014, and Mr. Tegeler had conveyed the same assets to FWM on August 21, 2014. [Finding of Fact Nos. 26-27]. And, the entity that now owned the Collateral (FWM) was owned not only by Mr. Tegeler, but also by Huebel. Because Huebel had no ownership interest in BCGC (i.e., Trustmark's borrower), the representation made by the Tegelers on the loan application was patently false.

34. Trustmark perfected its security interest in the Collateral on September 2, 2014, by recording the UCC filing statement with the Texas Secretary of State. [Pl.'s Ex. No. 4 at 1].

35. On September 12, 2014, Ms. Tegeler e-mailed Latricia Kuretich (" Kuretich "), Petrilla's loan administrative assistant, requesting Trustmark to make an advance of $300,000.00 to BCGC under the Note. [Pl.'s Ex. No. 12]. Kuretich responded to Ms. Tegeler's e-mail, advising Ms. Tegeler that a borrowing base certificate would be required *621 before an advance of $300,000.00 could be made under the Note. [ Id. ]. As of this date, Trustmark still did not know that Mr. Tegeler had executed the Conveyance on August 20, 2014, transferring all of BCGC's assets to himself, and then, the next day, he had sold all of these same assets to FWM pursuant to the Asset Purchase Agreement. [Oct. 24, 2017 Tr. 181:15-182:15].

36. On September 17, 2014, Ms. Tegeler, as an "authorized officer" of BCGC, signed and submitted a borrowing base certificate to Trustmark. The eligible accounts receivable set forth in this borrowing base certificate are shown to be those numbers in effect as of September 17, 2014-i.e., thirty days after Ms. Tegeler's execution of the Loan Documents at the loan closing that established the line of credit facility for BCGC. The certificate reflects that the total eligible accounts receivable was $389,324.00. Ms. Tegeler made the following representations in this borrowing base certificate on behalf of both Mr. Tegeler and herself:

To the best of our knowledge and belief, there have been no changes in the amounts stated above since the date of calculation which would cause the present balance of accounts and inventory to be less than the amount necessary to comply in all respects with this Certificate. We hereby affirm, represent and warrant to you the following as of the date hereof:

(1) there does not exist an Event of Default of any event or condition which, with notice of lapse of time, or both, would constitute an Event of Default under the terms of any agreement between us, including, without limitation, any loan agreement, security agreement, deed of trust, note and mortgage; (2) that all the representations and warranties previously given to you were correct when made and are reaffirmed as correct now; and (3) that we are in compliance with all terms, covenants and conditions of all agreements between us.

We hereby confirm to you that all of the above accounts, whether now owned or hereafter arising or acquired including but not limited to each and every account furnished to you under the provision of the Security Agreement, and all proceeds thereof and all liens, and securities, guarantees, remedies, and privileges pertaining hereto are, and heretofore have been assigned to you, and are and have been subject to a security interest in your favor, and have accordingly marked our records to reflect same.

[Pl.'s Ex. No. 13] (emphasis added).

a. The emphasized language in the first paragraph above was a material misrepresentation because as of September 17, 2014, the Debtors knew that BCGC (on August 20, 2014) had conveyed all of its assets to Mr. Tegeler, who almost immediately then conveyed the same assets to FWM. [Finding of Fact Nos. 26-27]. Stated differently, as of September 17, 2014, Ms. Tegeler knew that BCGC was a shell corporation with no assets. Thus, as of September 17, 2014, Ms. Tegeler's representation about BCGC's accounts receivable that "there have been no changes in the amounts stated above since the date of calculation which would cause the present balance of accounts and inventory to be less than the amount necessary to comply in all respects with this Certificate" was patently false.

b. The emphasized language in the second paragraph above was a material misrepresentation because as of September 17, 2014, the Debtors *622 knew that BCGC (on August 20, 2014) had conveyed all of its assets to Mr. Tegeler, who almost immediately then conveyed the same assets to FWM [Finding of Fact Nos. 26-27]-an entity in which her husband owned 50% of the stock and for which she was an officer. Thus, as of September 17, 2014, there did indeed exist Events of Default in the Loan Documents that the Debtors, as officers of BCGC, and in their individual capacities, had signed on August 18, 2014, at the loan closing. Specifically, as of September 17, 2014, the following Events of Default existed:

i. Paragraph 11(b) of the Revolving Loan Agreement contains representations and warranties by BCGC, which provide, "[BCGC] represents and warrants to [Trustmark] that ... [n]one of the accounts or inventory forming the basis of the collateral securing [BCGC's] indebtedness to [Trustmark] is or will be subject to any other superior liens, security interests or other encumbrance[s]." [Pl.'s Ex. No. 2 at 11, ¶ 11(b) ]. In fact, however, as of September 17, 2014, these assets had become encumbered, as FWM's two lenders (i.e., Lone Star Bank and Mainland Bank) had liens on all of FWM's assets, and FWM's assets by this date included the assets of BCGC to which Mr. Tegeler himself took title on August 20, 2014, and then conveyed to FWM on August 21, 2014.

ii. Paragraph 15(c) of the Revolving Loan Agreement defines "default" to include a breach of any covenant in the Note, or other Loan documents, or in this Revolving Loan Agreement." [Pl.'s Ex. No. 2 at 13, ¶ 15(c) ]. Paragraph 12(i) of the Revolving Loan Agreement (entitled "Affirmative Covenants") sets forth that BCGC will "[p]romptly notify the Lender of all material adverse changes in [BCGC's] financial condition." [Pl.'s Ex. No. 2 at 11-12, ¶ 12(i) ]. Yet, as of September 17, 2014, BCGC-which was controlled solely by the Debtors-had failed to notify Trustmark that on August 20, 2014, all of BCGC's assets had been conveyed to Mr. Tegeler for no consideration, who then the next day conveyed all of these same assets to FWM-thereby leaving BCGC with no assets. There is no question that the conveyance of all of BCGC's assets represented a "material adverse change" in BCGC's financial condition. Thus, BCGC was in default of Paragraph 12(i) as of September 17, 2014, but the Debtors failed to notify Trustmark.

iii. Paragraph 14(a) of the Revolving Loan Agreement (entitled "Negative Covenants") sets forth that BCGC "covenants that it will not, without the prior written consent of Bank ... make any other substantial change in its capitalization or character of its business." [Pl.'s Ex. No. 2 at 13, ¶ 14(a) ]. Yet, by September 17, 2014, all of BCGC's assets had been conveyed away through the acts of Mr. Tegeler, and therefore, the character of this business had substantially changed, as it had become a shell corporation.

iv. Paragraph 14(c) of the Revolving Loan Agreement sets forth that BCGC "covenants that it will not, without the prior written consent of Bank ... sell the majority of its assets used or useful in its business, *623 except in the ordinary course of business." [Pl.'s Ex. No. 2 at 13, ¶ 14(c) ]. By September 17, 2014, BCGC-solely through the acts of Mr. Tegeler with no consent-had conveyed away all of BCGC's assets for no consideration, and neither the first conveyance of these assets to Mr. Tegeler nor the second transfer to FWM were in the ordinary course of BCGC's business.

c. Additionally, the representation made by Ms. Tegeler in the first paragraph of the borrowing base certificate also created a misrepresentation under the Guaranty that she executed at the loan closing. Her Guaranty expressly sets forth that, "upon Lender's request, Guarantor will provide to Lender financial and credit information in form acceptable to Lender, and all such financial information which currently had been, and all future financial information which will be provided to Lender is and will be true and correct in all material respects and fairly present Guarantor's financial condition as of the dates the financial information is provided." Here, Ms. Tegeler's patently false representation in the borrowing base certificate meant that she was also making a blatantly false representation under her Guaranty.

37. Thus, on September 17, 2014-i.e., twenty-eight days after BCGC had conveyed all of its assets to Mr. Tegeler and twenty-seven days after Mr. Tegeler had sold these same assets to FWM-Ms. Tegeler submitted to Trustmark a borrowing base certificate falsely representing that BCGC's total eligible accounts receivable were $389,324.00 and that there were no Events of Default under the Loan Documents. [Pl.'s Ex. No. 7; see Adv. Doc. No. 50, p. 4 of 9]. The borrowing base certificate further falsely represented that BCGC's borrowing base was accurate as of September 17, 2014. [Pl.'s Ex. No. 7; see Adv. Doc. No. 50, p. 4 of 9; Oct. 25, 2017 Tr. 49:18-50:7].

38. On September 18, 2014, Johnson (Trustmark's junior lending officer), relying upon what he believed were true and accurate figures in the borrowing base certificate, adjusted the figures downward in the borrowing base certificate from $389,324.00 to $230,000.00 because the certificate included ineligible accounts receivable. [Pl.'s Ex. No. 7 at 34-36; Oct. 23, 2017 Tr. 51:22-53:1].

39. Based upon his analysis, Johnson approved the loan request; however, he informed Ms. Tegeler that based upon the formula set forth in the Loan Documents, the maximum amount BCGC could draw down under the line of credit was $230,000.00. [Pl.'s Ex. No. 7 at 34-36; Oct. 23, 2017 Tr. 51:22-52:22].

40. In response to Johnson's communication, Ms. Tegeler requested an advance of $230,000.00. [Pl.'s Ex. No. 7 at 34-36]. Specifically, Ms. Tegeler requested Trustmark to wire transfer $230,000.00 to BCGC's bank account at Frost Bank-an account in which Mr. Tegeler and Ms. Tegeler were the only authorized signatories. [Pl.'s Ex. No. 7 at 99, ¶¶ 29-36; Oct. 24, 2017 Tr. 108:19-109:4]. Trustmark processed this request on September 18, 2014, and the wire transfer was indeed effectuated. [Pl.'s Ex. No. 8].

41. After the loan proceeds posted to BCGC's bank account, Ms. Tegeler, as BCGC's Vice President with signature authority on BCGC's account, wrote three checks totaling, in the aggregate, $230,000.00. [Oct. 25, 2017 Tr. 72:19-73:22]. All three checks were payable to FWM from BCGC. [ Id. ]. The first check in the amount of $155,000.00 was dated September *624 19, 2014. [Oct. 25, 2017 Tr. 72:19-73:2]. The second check in the amount of $35,000.00 was dated on November 5, 2014. [Oct. 25, 2017 Tr. 73:10-16]. The third check in the amount of $40,000.00 was dated November 20, 2014. [ Id. ]. The sum of these three checks is $230,000.00. [Oct. 25, 2017 Tr. 73:17-22]. The Debtors did not inform Trustmark about these three checks. At trial, Mr. Tegeler admitted to using all of the Note proceeds for FWM's working capital and operating expenses, which usage was directly contrary to the representations made in the loan application and the Loan Documents that the loan proceeds would only be used for BCGC's operations. [Nov. 7, 2017 Tr. 101:18-25; Nov. 28, 2017 Tr. 35:12-14]. BCGC's operating account at Frost Bank remained open, and BCGC and FWM did not consolidate their respective books; indeed, BCGC and FWM maintained separate accounting records. [Nov. 7, 2017 Tr. 178:6-179:6; Oct. 27, 2017 Tr. 122:13-18]. These facts hardly reflect the so-called "merger" that the Debtors have insisted all along took place between BCGC and FWM.

42. Once Mr. Tegeler became a 50% owner of FWM as a result of the Asset Purchase Agreement, Ms. Tegeler became an officer of FWM. [Nov. 28, 2017 Tr. 32:19-24]. Specifically, she became FWM's Secretary. [ Id. ]. She was not a shareholder. [ Id. ]. At FWM, her duties included: bookkeeping, handling health insurance issues, addressing worker's compensation issues, and managing human resource matters. [Nov. 28, 2017 Tr. 32:25-33:6]. She did not draw a salary at FWM. [Nov. 28, 2017 Tr. 33:7-8]. Soon after Mr. Tegeler became a 50% owner of FWM, he and his wife became signatories on FWM's bank account. [Nov. 28, 2017 Tr. 33:9-12]. Huebel remained a signatory on this account. [ Id. ].

43. The Debtors, in their dual capacities as officers of BCGC and in their individual capacities as guarantors of the Note, made no efforts to transfer the Note held at Trustmark from BCGC's name to FWM's name, despite the Debtors' alleged intent to merge and operate as one company-i.e., as FWM. [Oct. 26, 2017 Tr. 65:1-10].

44. Pursuant to the Note, BCGC was required to make its first interest payment no later than October 12, 2014. [Pl.'s Ex. No. 1]. BCGC failed to do so. [Oct. 24, 2017 Tr. 23:25-24:3].

45. Furthermore, BCGC was required to submit to Trustmark borrowing base certificates each month. [Oct. 24, 2017 Tr. 126:20-127:1]. When BCGC failed to submit the October 2014 borrowing base certificate to Trustmark, Petrilla contacted Ms. Tegeler in early November of 2014 to request the documentation. [Oct. 24, 2017 Tr. 127:2-13-20]. At that time, Ms. Tegeler agreed to provide the borrowing base certificate to Petrilla and informed her that BCGC had "merged" with FWM. [Oct. 24, 2017 Tr. 127:14-18]. Subsequently, Petrilla requested FWM's financial information. [Oct. 24, 2017 Tr. 128:4-9].

46. On November 21, 2014, Petrilla and Miller (Trustmark's relationship manager) met with the Debtors at FWM's headquarters in Cleveland, Texas. [Oct. 24, 2017 Tr. 131:20-132:13, 154:1-11]. On November 25, 2014, Petrilla e-mailed Ms. Tegeler the borrowing base certificates dated September 30, 2014, and October 31, 2014, and requested her signature. [Oct. 24, 2017 Tr. 154:12-155:1; Defs.' Ex. No. 8]. After leaving FWM's facility, Petrilla conducted a UCC search on FWM and discovered that there was already an existing lien on FWM's accounts receivable. [Oct. 24, 2017 Tr. 136:2-11]. On November 17, 2014, Petrilla requested additional financial information to further investigate the nature of *625 the BCGC-FWM transaction, and the Debtors thereafter sent the Asset Purchase Agreement to her. [ Id. ; Defs.' Ex. No. 7 at 18]. Further, on November 17, 2014, Petrilla e-mailed Ms. Tegeler, stating, in part: "Good afternoon. Just wanted to check on the status of the September and October Borrowing Base Certificates and A/R agings. Also, Bob [Stephens] mentioned that you would have the tax id number for FWM Tubular for the new loan documents. Can you please [sic] the tax number to me too?" [Defs.' Ex. No. 7 at 18]. On November 19, 2014, Ms. Tegeler provided FWM's tax identification number to Petrilla. [ Id. ]. Furthermore, Ms. Tegeler told Petrilla, "We would like to discuss our borrowing base report when you arrive because of the way we are doing it with the merger. It can be a bit confusing and I want to be sure you can see what the issue is." [ Id. ].

47. After determining that BCGC was in default because its assets (i.e., the Collateral) had been transferred to FWM, Petrilla decided to involve Reed Cook (" Cook ") in dealing with this problem loan. [Oct. 24, 2017 Tr. 136:24-137:9]. Cook is the Senior Vice President and Senior Credit Officer at Trustmark. [Oct. 24, 2017 Tr. 20:25-21:2]. He has been a banker for thirty-five years. [Oct. 24, 2017 Tr. 73:16-17]. He has been employed by Trustmark for approximately fifteen years. [Oct. 23, 2017 Tr. 24:24-25:20]. Cook is responsible for overseeing the credit approval and credit policy process for loan transactions in Texas. [ Id. ]. His duties and responsibilities have been the same since 2014 until the date of the trial. [ Id. ]. Cook does not become involved in the loan collection process unless, among other reasons, a problem exists with the loan. [Oct. 24, 2017 Tr. 38:12-16]. Cook was not involved in the origination of the BCGC loan. [Oct. 23, 2017 Tr. 55:19-21]. However, he became involved in November 2014 when Petrilla notified him about issues concerning the BCGC loan. [Oct. 23, 2017 Tr. 56:23-57:5].

48. After speaking with Cook about both the monetary and non-monetary defaults under the Loan Documents, Petrilla-having now reviewed the Asset Purchase Agreement and having gained an appreciation for the transaction that occurred on August 21, 2014-scheduled a meeting with Huebel to discuss the Note. [Oct. 24, 2017 Tr. 139:8-140:25]. Specifically, Petrilla scheduled this meeting with Huebel to obtain Huebel's personal guaranty on the existing debt-i.e., the Note-by having him execute a guaranty for the benefit of Trustmark. [Oct. 24, 2017 Tr. 173:8-14]. Although he initially had agreed to meet with Petrilla, Huebel refused to speak with her when she arrived at FWM's office and introduced herself, and he then refused to sign the personal guaranty that Petrilla had brought with her. [Oct. 24, 2017 Tr. 141:1-18, 173:15-24].

49. After BCGC defaulted on the loan, Cook made efforts to try to remediate the default with the Debtors and collect the balance owed under the Note, but was unsuccessful in these efforts. [Oct. 23, 2017 Tr. 55:22-57:5].

50. Trustmark retained legal counsel to collect the balance due and owing under the Note. [Pl.'s Ex. No. 9]. On April 10, 2015, Trustmark's legal counsel sent the Debtors a Notice of Default and Acceleration and Demand for Payment, declaring that the sale or transfer of the Collateral was a non-curable event of default under the Note and the Revolving Loan Agreement. [ Id. ]. This notice further stated the following:

By reason of this non-curable event of default, Trustmark hereby gives notice that Note 72633 is now accelerated. Demand is hereby made for immediate payment of the unpaid principal balance *626 of Note 72633, plus all accrued and unpaid interest and late charges, which as of April 10, 2015 is $229,983.71. Pursuant to the terms of Note 72633, Borrower has agreed to pay Trustmark's reasonable attorneys' fees in the event payment is not made in response to this demand.

[ Id. ].

51. On June 30, 2015, FWM sent a check in the amount of $1,694.33 to Trustmark, despite the fact that the Note was already in default for non-payment. [Defs.' Ex. No. 12; Oct. 25, 2017 Tr. 9:3-18]. Huebel, as an authorized signatory on FWM's operating account, signed this check. [Defs.' Ex. No. 12; Oct. 25, 2017 Tr. 9:3-18]. This payment represents two separate payments. [Defs.' Ex. No. 12; Oct. 25, 2017 Tr. 9:3-18]. The first payment totaled $852.60 for May 1, 2015. [Defs.' Ex. No. 12; Oct. 25, 2017 Tr. 9:3-18]. The second payment totaled $841.73 for June 1, 2015. [Defs.' Ex. No. 12; Oct. 25, 2017 Tr. 9:3-18]. Trustmark applied this payment against the balance due under the Note. [Defs.' Ex. No. 12; Oct. 25, 2017 Tr. 9:3-18]. Although Trustmark accepted the two payments, Trustmark's receipt of the funds did not waive the acceleration of the entire balance under the Note. 16 [Oct. 25, 2017 Tr. 10:4-16].

52. Lone Star Bank and Mainland Bank had a lien on FWM's equipment prior to Mr. Tegeler's execution of the Asset Purchase Agreement on August 21, 2014, transferring all of BCGC's assets (including its equipment) to FWM. Therefore, when FWM took title to these assets, the existing lien held by Lone Star Bank and Mainland Bank attached to all of these assets. [Oct. 25, 2017 Tr. 50:5-17]. Subsequently, FWM defaulted on its obligations with Lone Star Bank. [ Id. ]. In an effort to create a suitable repayment plan, FWM executed a forbearance agreement. [Oct. 25, 2017 Tr. 50:18-24]. Eventually, in 2016, FWM ceased operations when Lone Star Bank and Mainland Bank declared a default on the forbearance agreement, and then repossessed and liquidated FWM's assets, including the assets on which Trustmark had a lien (i.e., the Collateral). 17 [Oct. 25, 2017 Tr. 50:10-51:14]. Therefore, Trustmark's loan to BCGC became a completely unsecured loan.

53. BCGC has never made any payments to reduce the balance owed under the Note. BCGC owes Trustmark the principal amount of $230,000.00 under the Note, plus all accrued and unpaid interest and late charges. [Pl.'s Ex. No. 9]. The Debtors, in their individual capacities, owe this same amount by virtue of the Guaranties.

*627 54. On November 7, 2016, the Debtors filed a voluntary Chapter 7 petition (the " Petition Date "), and the Clerk of Court assigned case number 16-35634 to this main case. [Main Case No. 16-35634, Doc. No. 1].

55. On March 21, 2017, Trustmark filed a proof of claim in the main case. [Pl.'s Ex. No. 14]. The proof of claim sets forth that as of the Petition Date, the amount of unpaid principal, accrued unpaid interest, and accrued unpaid late charges due under the Note were $230,000.00, $14,447.22, and $12,269.32, respectively-for a total amount of $256,716.54. The proof of claim also sets forth that the per diem interest accrual is $28.75. Finally, the proof of claim sets forth that Trustmark is an unsecured creditor.

III. CREDIBILITY OF THE WITNESSES

A. The Debtors' Witnesses

1. Mr. Tegeler

The Court finds that Mr. Tegeler is not a credible witness. During his testimony at trial, he gave answers which directly contradicted answers he had previously given earlier in the trial. For example, some of his contradictory statements relate to whether he read any of the drafts or the final version of the Asset Purchase Agreement. The following questions and answers from the trial are some examples that illustrate his contradictory statements regarding the Asset Purchase Agreement:

When Mr. Tegeler was first asked whether he read the Asset Purchase Agreement, he was quite clear that he had done so:

Plaintiff's Counsel: Now, do you recall having signed an Asset Purchase Agreement?

Mr. Tegeler: Yes, I did.

Plaintiff's Counsel: And did you read it before you signed it?

Mr. Tegeler: Yes, sir, I read it with people.

[Oct. 26, 2017 Tr. 15:24-16:3].

Later on, however, he backed off, and his testimony changed a bit:

Plaintiff's Counsel: Did you read this Asset Purchase Agreement before you signed it?

Mr. Tegeler: I don't know if I read every bit of it, but I was-'cept that Bob [Stephens] explained it all to me when I signed it.

[Oct. 26, 2017 Tr. 18:16-19].

Further on in the trial, however, he was even less certain that he had read this document:

Plaintiff's Counsel: Do you recall the Asset Purchase Agreement initially proposing that you-I mean that BCGC would be the seller instead of you personally?

Mr. Tegeler: Probably somebody else did. I mean, I'm sure I read it or I saw it. I don't know. I don't remember that.

[Nov. 6, 2017 Tr. 9:24-10:3].

Finally, later on in the trial, Mr. Tegeler, contradicted his prior testimony and stated that he had not ever read the Asset Purchase Agreement:

Plaintiff's Counsel: Did you read any of the drafts of the Asset Purchase Agreement?

Mr. Tegeler: No.

Plaintiff's Counsel: You didn't read any of them?

Mr. Tegeler: Nope.

Plaintiff's Counsel: Did you read it before you signed it?

Mr. Tegeler: No.

Plaintiff's Counsel: You didn't read it before you signed it?

*628 Mr. Tegeler: Well I had Bob [Stephens] and them to make sure everything was right.

Plaintiff's Counsel: Okay, well then-

Mr. Tegeler: If I can address-

Plaintiff's Counsel: No, I'm sorry, sir you can't address anything. You have to answer my questions, okay. Now in prior testimony, you said-I asked the question, "And did you read it before you signed it?" I was talking about the Asset Purchase Agreement. And your answer was, "Yes, sir I read it with people." So now you're telling me you didn't read it at all.

Mr. Tegeler: No, I didn't want to feel stupid. You already made me feel like I was stupid up here. So I answered so that I didn't look that way.

[Nov. 7, 2017 Tr. 86:16-87:11].

Mr. Tegeler's contradictory testimony about the Asset Purchase Agreement is not the only document about which he gave conflicting testimony at trial. With respect to the Loan Documents, Mr. Tegeler's conflicting testimony was as follows:

Defendants' Counsel: Do you remember reviewing Trustmark loan documents when [Plaintiff's Counsel] was asking you questions?

Mr. Tegeler: Yes.

Defendants' Counsel: Do you remember him asking you whether you read all of the Trustmark loan documents before you signed them?

Mr. Tegeler: Yes.

Defendants' Counsel: Okay. What did you tell him about whether you had read all of the Trustmark loan documents prior to signing?

Mr. Tegeler: I said yes.

Defendants' Counsel: Had you really gone through all of those Trustmark loan documents paragraph-by-paragraph?

Mr. Tegeler: No.

Defendants' Counsel: Then why did you answer him that way?

Mr. Tegeler: I already felt stupid.

Defendants' Counsel: Okay. And why is that?

Mr. Tegeler: Because I was just doing stuff, I mean, you know, I run out-it's hard for me to get up here, I-you question me on something and, you know, I didn't do it and that would be, why are you signing something you didn't read.

[Nov. 7, 2017 Tr. 14:16-15:9].

The record reflects there is still more testimony that underscores Mr. Tegeler's lack of credibility:

Defendants' Counsel: Okay. When you were mentioning or using the word merger with ... Petrilla at the, let's call it pre-closing meeting at the Trustmark office and the closing at Trustmark's office, had you studied or done anything to learn what the technical legal definition of merger was?

Mr. Tegeler: No.

Defendants' Counsel: Okay. What were you trying to convey?

Mr. Tegeler: The two companies were coming together as one, it'd all be one.

[Oct. 25, 2017 Tr. 56:6-14].

Plaintiff's Counsel: And two days later, on August 20th, you transferred all of the assets of BCGC to yourself?

Mr. Tegeler: Correct.

Plaintiff's Counsel: And you did not tell Trustmark that?

Mr. Tegeler: I did not, no. I told Trustmark we were merging together, whatever we had before that. The very first meeting with Christy [Petrilla] and Bob [Stephens].

*629 Plaintiff's Counsel: And it was not a merger, was it? The documents that we have reviewed for the past hour-and-a-half were Asset Purchase Agreements beginning in early August, August 1st is the first draft we reviewed. Every single one of them say, Asset Purchase Agreement, don't they?

Mr. Tegeler: Correct.

Plaintiff's Counsel: They do not say corporate merger?

Mr. Tegeler: No, they do not.

[Nov. 6, 2017 Tr. 59:15-60:4]. The significance about this exchange is that Mr. Tegeler alleges that he notified Petrilla at both the initial meeting in July of 2014 and the loan closing held on August 18, 2014, that BCGC planned to merge with FWM. Stated differently, Mr. Tegeler attempts to convince the Court that he has been very forthcoming with Trustmark and all along disclosed his true intentions to merge with FWM. Contrary to this representation, Mr. Tegeler did not notify Petrilla that he transferred all of BCGC's assets to himself personally. [Finding of Fact No. 26]. Above all, Mr. Tegeler testified that he reviewed many drafts of the Asset Purchase Agreement, and none of the drafts described a merger or even contained the word "merger" in the document. [Nov. 6, 2017 Tr. 6:24-7:5]. Therefore, it remains eminently clear that this testimony undermines his credibility.

Additionally, Mr. Tegeler attempts to convince the Court that he was combining two companies: BCGC and FWM. However, his actions illustrate anything but a so-called "combination" of two companies. First, he surreptitiously transferred all of BCGC's assets to himself personally. [Finding of Fact No. 26]. This transaction does not describe a combination of two companies because Mr. Tegeler is an individual, and not an entity. Second, Mr. Tegeler then executed the Asset Purchase Agreement and conveyed all of these same assets to FWM. [Finding of Fact No. 27]. Similarly, this transaction does not describe a combination of two companies because BCGC remained in existence as a shell company. Indeed, as stated herein, this transaction was merely an asset sale. Third, after Ms. Tegeler transferred $230,000.00 of the loan proceeds to FWM, the Debtors kept BCGC's bank account open. [Finding of Fact No. 41]. Stated differently, the Debtors managed BCGC's account as well as FWM's account. [ Id. ; Finding of Fact No. 42]. These circumstances certainly do not describe the combination of two entities. Finally, even after all of these transactions, Mr. Tegeler testified that BCGC and FWM did not consolidate their books; indeed, BCGC and FWM maintained separate accounting records. [ Id. ]. Once again, these circumstances hardly describe the combination of two entities whatsoever.

Thus, Mr. Tegeler's explanation to the Court regarding the alleged merger is unpersuasive for these very critical reasons, which casts a pall on his credibility.

2. Ms. Tegeler

At first blush, Ms. Tegeler appeared to be a credible witness. However, this Court recognizes that many of her statements were-not unsurprisingly-aimed to protect Mr. Tegeler's conduct when these transactions transpired. Specifically, Ms. Tegeler's testimony concerning the false borrowing base certificate illustrates her bias as follows:

Plaintiff's Counsel: Did you hear your husband's testimony regarding the line of credit with Mainland Bank and the gray inventory?

Ms. Tegeler: I did.

Plaintiff's Counsel: And he was upset because he had signed a borrowing *630 base certificate for Mainland Bank for-on behalf of FWM.

Ms. Tegeler: Yes.

Plaintiff's Counsel: You heard that testimony.

Ms. Tegeler: Yes, he was very upset.

Plaintiff's Counsel: And he was upset because Mr. Huebel had not told him that some of the inventory was, in fact, not owned by FWM, correct?

Ms. Tegeler: That is correct.

Plaintiff's Counsel: Yet, it was included on a borrowing base certificate given to Mainland Bank. Right. And that bothered him because he's an ethical man.

Plaintiff's Counsel: So what's the difference between the collateral on the Mainland Bank borrowing base certificate that didn't really belong to FWM, and the accounts receivable on the Trustmark borrowing base that didn't belong to BCGC?

Ms. Tegeler: I didn't understand it that way because, like I said, we still have the same customers, we still have the same income coming in, we're still-BC Gulf Coast's name is still on insurance. We still-

...

Ms. Tegeler: Well, what I'm saying is, in my mind, in our intentions was to go forward the way it was all planned, to make this all right, good, do business as usual. We still have our customers that are happy with us, still doing business. We still have receivables, we still have invoices going out. In my-

...

Ms. Tegeler: In my mind, everything was going on as planned.

[Nov. 27, 2017 Tr. 137:11-139:1].

The significance of this testimony is to show that Ms. Tegeler is a very crafty witness. Here, the Debtors committed the same unscrupulous conduct at two different companies: BCGC and FWM. Indeed, Ms. Tegeler expressed remorse on behalf of her husband for signing false borrowing base certificates-which reflected inventory that FWM did not own. However, at trial, she was exposed for the exact same conduct-signing a blatantly false borrowing base certificate on behalf of BCGC, which reflected accounts receivable of $389,324.00 that, as of September 17, 2014, BCGC no longer owned due to her husband's execution of the Conveyance and Asset Purchase Agreement the previous month. [Finding of Fact Nos. 26-27, 37]. Ms. Tegeler appeared to downplay and justify her actions instead of expressing remorse for her own deceitful conduct. This behavior tarnishes her credibility.

Furthermore, Ms. Tegeler's testimony is also questionable as it relates to notifying Petrilla about the transaction contemplated between BCGC and FWM at the loan closing. Specifically, Ms. Tegeler vividly recalls that her husband had informed Petrilla about BCGC's transaction with FWM:

Defendants' Counsel: Is there any doubt in your mind that [Mr. Tegeler], once again, told [Petrilla] that [BCGC] was, quote, "wanting to merge" with FWM?

...

Ms. Tegeler: I have no doubt in my mind that everything was open, talked about, on the table, however you want to put it. There was-there's no doubt in my mind.

Defendants' Counsel: Okay. No doubt in your mind that what?

Ms. Tegeler: That [Mr. Tegeler] was open, [Petrilla] knew we were moving forward.

Defendants' Counsel: Okay. Now let me break that down. That [Petrilla]

*631 knew-there was no doubt in your mind that [Petrilla] knew what?

Ms. Tegeler: That we were joining forces with FWM, going over there to go to the bigger facility, get more machines, everything was moving forward.

Defendants' Counsel: Okay. After [Mr. Tegeler] told [Petrilla] that, did you perceive any hesitation, trepidation or concern in [Petrilla]?

Ms. Tegeler: No.

[Nov. 7, 2017 Tr. 147:13-148:10]. The Court has already made a finding that the Debtors and their representatives (Stephens and LeBlanc) did not disclose the Asset Purchase Agreement or Conveyance to Trustmark. [Finding of Fact Nos. 17, 26, 32]. Therefore, Ms. Tegeler's testimony regarding the certainty of her husband's disclosure of the so-called "merger" undermines her credibility because this information simply is not true.

Other than her failure to truthfully testify regarding these two material points, the Court finds that Ms. Tegeler was credible in her testimony regarding other material issues raised at trial. Specifically, Ms. Tegeler credibly testified about the business divorce between the Debtors and the Stuteses, including the urgency to relocate BCGC's headquarters from Spring, Texas, to Cleveland, Texas. Furthermore, she credibly testified about her employment at FWM. Accordingly, the Court gives some weight to her testimony.

3. Bob Stephens

Stephens was the CPA for the Debtors and BCGC. [Finding of Fact No. 11]. In addition to representing the Debtors and their company, Stephens also had a business relationship with Trustmark. [Finding of Fact No. 11(g) ]. Specifically, Stephens' company audited Trustmark's accounts receivables and inspected its inventory, and then his company provided Trustmark with a professional report of its findings. [ Id. ]. He was also a customer of Trustmark; indeed, he has a working capital line of credit with Trustmark. [Finding of Fact No. 11(f) ]. Stephens testified that he was extensively involved with assisting the Debtors consummate their business transactions. [Oct. 26, 2017 Tr. 143:22-144:13]. Specifically, Stephens testified that he assisted the Debtors, on behalf of BCGC, with the following transactions: (1) obtaining a line of credit for BCGC; and (2) assisting the Debtors with the preparation of the Asset Purchase Agreement. [ Id. ]. Despite Stephens' active participation in these transactions, he could not recall any basic details regarding the activity during this relevant time period.

The Court is skeptical that a seasoned CPA cannot recall any of the details set forth below. Below are examples of Stephens' inability to recollect that cast aspersions on his credibility:

Example # 1

Plaintiff's Counsel: So on August 18th when you're in the bank's offices and they're signing the loan, did you say across the table, [Mr. Tegeler], did you get that waiver from [Petrilla]?

Stephens: I don't remember.

Plaintiff's Counsel: Well, that's-

Stephens: I don't remember that that's when the waiver was requested.

Plaintiff's Counsel: Would you ask for the waiver after the loan closed?

Stephens: I'd have to look at the e-mail.

Plaintiff's Counsel: Let's speak professionally. What point would it be to ask for the waiver after the loan had been closed?

Stephens: I don't know.

[Oct. 26, 2017 Tr. 160:12-23].

Example # 2 *632 Plaintiff's Counsel: So are we to believe you, when you say in your e-mail on the day after the closing, August 19, 2014, "Trustmark is aware of the transaction and have instructed us that they have no problem rolling these loans to the new entity without having to execute new loan agreements." Was that a true statement when you made it, sir?

Stephens: I believed it was true when I did.

Plaintiff's Counsel: And from what source did you obtain that information from Trustmark?

Stephens: I do not recall.

Plaintiff's Counsel: Sir, this e-mail is one day after you sat in the bank's offices and witnessed a loan closing. Are we to believe that you went into the loan closing, did not provide the bank with a copy of the Asset Purchase Agreement, in fact, I'll ask the question. Did you ever provide the bank with a copy of the Asset Purchase Agreement?

Stephens: I don't recall.

Plaintiff's Counsel: You go further and say, "They will simply require an amendment to name FWM as the maker." Who told you that at Trustmark?

Stephens: I don't recall and I don't recall that anybody from Trustmark told me that.

Plaintiff's Counsel: Were you lying to these people on August 19, 2014?

Stephens: No, sir.

Plaintiff's Counsel: Are you lying to us now when you say you don't remember whether you'd said anything at the closing or not?

Stephens: No, sir.

[Oct. 26, 2017 Tr. 165:15-166:17].

Example # 3

Plaintiff's Counsel: You have no recollection of having been involved either as a drafter or a reviewer or a consultant or some participation in a plan of complete liquidation of BCGC dated August 20, 2014?

Stephens: No.

Plaintiff's Counsel: Yet your Declaration says you were assisting with the winding up of the business.

Stephens: Correct.

[Oct. 27, 2017 Tr. 33:4-11].

These are only three snippets from the trial during which Stephens claimed that he could not recall anything. The Court simply does not believe him. It strains credulity, for example, that Stephens-who had extensive dealings with Trustmark [Finding of Fact Nos. 11-16, 22-25, 32, 46]-cannot recall which Trustmark employee told him that "Trustmark is aware of the transaction and have instructed us that they have no problem rolling these loans to the new entity without having to execute new loan agreements." The Court expressly finds that no one at Trustmark ever made such a statement to Stephens; that, in fact, he was lying to FWM in his e-mail of August 19, 2014, in order to maximize the chances of consummating the transaction between BCGC and FWM so that Mr. Tegeler could acquire 50% of FWM's stock; and that his "I do not recall" response at trial was given in order to try to convince this Court that someone at Trustmark did in fact make the statement to him. The Court finds that Stephens' testimony is disingenuous at best, and downright perjurious at worst.

Moreover, it seriously strains credulity to believe Stephens' testimony that he has no recollection of drafting or reviewing the documents associated with BCGC's transfers of its assets. Indeed, his invoice of $21,000.00 to BCGC dated July 29, 2014, contains the following description of his *633 services: "In connection with meetings, e-mails, correspondence, financials, etc. for negotiation and completion of acquisition. 85 hours@ $300/hr." [Finding of Fact No. 11(d) ]. And, his invoice of $8,600.00 to BCGC dated September 4, 2014, contains the following description of his services: "In connection with meetings, calls, correspondence with client and bank, document review, and related matters regarding negotiation and completion of 2nd transaction. 34.5 hours x $250/hr." [ Id. ]. Accordingly, the Court gives no weight to this particular testimony, and very little weight to the remaining testimony that he gave.

B. Trustmark's Witnesses

1. Reed Cook

Cook is the Senior Vice President and Senior Credit Officer at Trustmark. The Court finds that his testimony is very credible, and the Court gives substantial weight to this testimony.

2. Christy Petrilla

Petrilla is a VP Commercial Lender at Trustmark. The Court finds that all of her testimony is very credible, and the Court gives substantial weight to this testimony. Of particular significance, she testified that neither Mr. Tegeler, Ms. Tegeler, nor Stephens ever told her that they collectively contemplated an asset sale of BCGC's assets to, or a corporate merger with, FWM. She also testified that she had never even heard of FWM until the telephone conversation with Ms. Tegeler in November 2014 (at which time Ms. Tegeler informed her that BCGC had "merged" with FWM). [Oct. 24, 2017 Tr. 104:20-25]. The Court believes that Petrilla told the truth and that Mr. and Ms. Tegeler did not.

3. Wayne Johnson

The Court finds Johnson to be a credible witness and gives his testimony substantial weight.

4. Jonathan Miller

The Court finds Miller to be a credible witness and gives his testimony substantial weight.

IV. CONCLUSIONS OF LAW

A. Jurisdiction

This Court has jurisdiction over this dispute pursuant to 28 U.S.C. § 1334 (b). Section 1334(b) provides that "the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11 [the Bankruptcy Code], or arising in or related to cases under title 11." District courts may, in turn, refer these proceedings to the bankruptcy judges for that district. 28 U.S.C. § 157 (a). In the Southern District of Texas, General Order 2012-6 (entitled General Order of Reference) automatically refers all eligible cases and proceedings to the bankruptcy courts.

This suit is a core proceeding because it is a suit to determine the dischargeability of a specific debt pursuant to 28 U.S.C. § 157 (b)(2)(I). This suit 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. 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) ). Preventing the discharge of a specific debt-here, the amount owed under the Note for which the Debtors are liable under the Guaranties-can only occur in a bankruptcy court. There is no state law equivalent for this action.

*634 B. Venue

Venue is proper under 28 U.S.C. § 1409 (a). 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 commenced in the district court in which such case is pending." The Debtors' main Chapter 7 case is presently pending in this Court; therefore, venue of this adversary proceeding is proper.

C. Constitutional Authority to Enter a Final Judgment in the Adversary Proceeding at Bar

In the wake of the Supreme Court's issuance of Stern v. Marshall , 564 U.S. 462 , 131 S.Ct. 2594 , 180 L.Ed.2d 475 (2011), this Court is required to determine whether it has the constitutional authority to enter a final judgment adjudicating the suit at bar. In Stern , which involved a core proceeding brought by the debtor under 28 § 157(b)(2)(C), the Supreme Court held that a bankruptcy court "lacked the constitutional authority to enter a final judgment on a state law counterclaim that is not resolved in the process of ruling on a creditor's proof of claim." 564 U.S. at 503 , 131 S.Ct. 2594 . As indicated above, the pending dispute before this Court is a core proceeding pursuant to 28 U.S.C. § 157 (b)(2)(I). The ruling in Stern was only limited to the one specific type of core proceeding involved in that dispute, which is not implicated here. Accordingly, this Court concludes that the narrow limitation imposed by Stern does not prohibit this Court from entering a final judgment here. 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) , 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 ).

Alternatively, even if Stern applies to all of the categories of core proceedings brought under § 157(b)(2), see First Nat'l Bank v. Crescent Elec. Supply Co. (In re Renaissance Hosp. Grand Prairie Inc.) , 713 F.3d 285 , 294 n.12 (5th Cir. 2013) (" Stern 's 'in one isolated respect' language may understate the totality of the encroachment upon the Judicial Branch posed by Section 157(b)(2)...."), this Court still concludes that the limitation imposed by Stern does not prohibit this Court from entering a final judgment in the dispute at bar. In Stern , the debtor filed a counterclaim based solely on state law; whereas, here, the claims brought by Trustmark are based primarily on express provisions of the Bankruptcy Code- §§ 523(a)(2) and (a)(6) -and judicially-created bankruptcy law interpreting these provisions. 18 This Court is therefore constitutionally authorized to enter a final judgment on the Complaint.

Finally, in the alternative, this Court has the constitutional authority to enter a final judgment on the Complaint because Trustmark and the Debtors have consented, impliedly if not explicitly, to adjudication of this dispute by this Court.

*635 Wellness Int'l Network, Ltd. v. Sharif , --- U.S. ----, 135 S.Ct. 1932 , 1947, 191 L.Ed.2d 911 (2015) ("Sharif contends 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 ...."). Here, the parties have never objected to this Court's constitutional authority to enter a final judgment-either in their pleadings or their pre-trial statement. Moreover, the parties participated in a multi-day trial in this Court, and not once did they ever object to this Court's constitutional authority to enter a final judgment. If these circumstances do not constitute consent-implied, if not express-then nothing does.

D. Dischargeability of Debt Under 11 U.S.C. § 523 (a)(2)(A)

In an adversary proceeding to determine the dischargeability of a debt under § 523(a), the plaintiff bears the burden of proving the elements by a preponderance of the evidence. 19 Grogan v. Garner , 498 U.S. 279 , 286, 111 S.Ct. 654 , 112 L.Ed.2d 755 (1991) ; Tower Credit, Inc. v. Gauthier (In re Gauthier) , 349 F. App'x 943 , 945 (5th Cir. 2009) ; Allison v. Roberts (In re Allison) , 960 F.2d 481 , 483 (5th Cir. 1992) ; RecoverEdge L.P. v. Pentecost , 44 F.3d 1284 , 1292 (5th Cir. 1995) ; Fed. R. Bankr. P. 4005. "Intertwined with this burden is the basic principle of bankruptcy that exceptions to discharge must be strictly construed against a creditor and liberally construed in favor of a debtor so that the debtor may be afforded a fresh start." Hudson v. Raggio & Raggio, Inc. (In re Hudson) , 107 F.3d 355 , 356 (5th Cir. 1997). However, the Code affords relief only to the "honest but unfortunate debtor," and an individual may not obtain a discharge of debts incurred through his own wrongful conduct. Grogan , 498 U.S. at 286 , 111 S.Ct. 654 ; Turbo Aleae Invs., Inc. v. Borschow (In re Borschow) , 467 B.R. 410 , 417 (W.D. Tex. 2012). As set forth below, Trustmark has met its burden of proving the elements of all of its claims under § 523(a)(2)(A) and § 523(a)(6).

E. Description of the Debt that Trustmark Asserts Should Not to Be Discharged

At the outset, it is important to define which debt Trustmark seeks to prevent from being discharged. First, the Debtors executed the Guaranties that guarantee repayment of any amounts owed by BCGC under the Note. Thus, because the principal balance of the Note that BCGC did not pay is $230,000.00, the Debtors each have individual liability, jointly and severally, for this amount; and Trustmark alleges that neither of the Debtors should be discharged from this liability. Trustmark's contention is that pursuant to § 523(a)(2)(A), the Debtors incurred this guarantor liability through false representations, false pretenses, and actual fraud associated with the extension of credit that Trustmark provided to BCGC. See, e.g. , Weiss v. Alicea (In re Alicea) , 230 B.R. 492 , 501 (Bankr. S.D.N.Y. 1999) ("Similarly, it alleges that [the debtor] knew when he personally guaranteed the fees that he had already committed his personal assets to other ventures and could not honor his personal guarantee.");

*636 Buckeye Ret. Co., LLC v. Kakde (In re Kakde) , 382 B.R. 411 , 419 (Bankr. S.D. Ohio 2008) (footnote omitted) ("Buckeye asserts that the debt owed by Mr. Kakde to Buckeye pursuant to Mr. Kakde's personal guaranty is nondischargeable under 11 U.S.C. § 523 (a)(2)(B) because USAT obtained advances under the Loan guaranteed by Mr. Kakde ... by means of the intentional or reckless submissions to Provident of false Borrowing Base Certificates."). Further, Trustmark's contention is that pursuant to § 523(a)(6), Mr. Tegeler's and Ms. Tegeler's liability under the Guaranties is nondischargeable due to their willful and malicious injury to Trustmark's property-i.e., its lien on the Collateral-by surreptitiously conveying all of BCGC's assets to FWM, which resulted in FWM's lenders acquiring a lien on these assets and subsequently foreclosing thereon. The secret transfers include not only the transfer of the assets on August 21, 2014, but also the three checks written on BCGC's account, transferring the loan proceeds of $230,000.00 in September and November of 2014 from BCGC's account to FWM's account. [Finding of Fact Nos. 27, 41].

Alternatively, there is a separate and distinct debt that Trustmark seeks to prevent from being discharged. This is the debt arising from the piercing of BCGC's corporate veil under the "actual fraud" claim brought by Trustmark under § 523(a)(2)(A). Stated differently, Trustmark's position is that even if the Debtors had not executed the Guaranties creating individual liability for the balance owed under the Note, they each have become individually liable for this balance because Trustmark has satisfied all of the elements required under: (1) applicable Texas law for piercing BCGC's corporate veil to impose individual liability on the Debtors; and (2) § 523(a)(2)(A). See, e.g. , Husky Int'l Elecs. v. Ritz (In re Ritz) , 567 B.R. 715 , 758-59 (Bankr. S.D. Tex. 2017).

In sum, under one basis (guaranty liability) or another (piercing the corporate veil liability), Trustmark contends that the Debtors owe them a nondischargeable debt as of the Petition Date of $256,716.54 (the "$256,716.54 Debt "). 20 The Court will now address Trustmark's claims in the following order: guarantor liability under § 523(a)(2)(A) ; piercing the corporate veil liability under § 523(a)(2)(A) ; and guarantor liability under § 523(a)(6).

F. Overview of Trustmark's Claims under § 523(a)(2)(A) Based Upon the Debtors' Guarantor Liability

Trustmark has brought three claims against the Debtors under § 523(a)(2)(A) : one for false representations; one for false pretenses; and one for *637 actual fraud. Though other circuits have applied a uniform standard to all of these § 523(a)(2)(A) causes of action, 21 the Fifth Circuit has distinguished the elements of "actual fraud" from "false pretenses" and "false representations." RecoverEdge L.P. , 44 F.3d at 1292 -93 .

The distinction recognized by the Fifth Circuit appears to be a chronological one, resting upon whether a debtor's representation is made with reference to a future event, as opposed to a representation regarding a past or existing fact. [A debtor's promise ... related to a future action which does not purport to depict current or past fact ... therefore cannot be defined as a false representation or a false pretense].

Pak v. Kim (In re Kim) , No. 12-40813, 2013 WL 5376526 , at *10 (Bankr. E.D. Tex. Sept. 25, 2013) (citing Bank of La. v. Bercier (In re Bercier) , 934 F.2d 689 , 692 (5th Cir. 1991) ).

Moreover, there is also a distinction between false representations and false pretenses. Wright v. Minardi (In re Minardi) , 536 B.R. 171 , 187 (Bankr. E.D. Tex. 2015) (quotation omitted) ("While false pretenses and false representation both involve intentional conduct intended to create and foster a false impression, the distinction is that a false representation involves an express statement, while a claim of false pretenses may be premised on misleading conduct without an explicit statement."); Argento v. Cahill (In re Cahill) , No. 15-72418-REG, 2017 WL 713565 , at *6 (Bankr. E.D.N.Y Feb. 27, 2017) ("While most times both conduct and explicit statements by the debtor exist, thereby establishing a fraud under both false pretenses and false representation, the creditor may be able to establish the debtor's conduct without a showing of explicit statements or explicit statements without a showing of the debtor's conduct and still be successful under § 523(a)(2)(A)."); Evans v. Dunston (In re Dunston) , 117 B.R. 632 , 641 (Bankr. D. Colo. 1990) (" 'False Pretense' is more like a con game than a stickup. It is more like being dealt from the bottom of the deck than being mugged. A false pretense is generally employed by stealth, implication, and misdirection, while fraud and false representations are typically implemented more by fabrication, explication, and diversion."). Thus, the Court will separately examine Trustmark's claim for false representations, its claim for false pretenses, and its claim for actual fraud.

G. Trustmark's Claim Under § 523(a)(2)(A) for False Representations

Trustmark's first claim against the Debtors is based upon § 523(a)(2)(A) for false representations. Trustmark contends that the Debtors obtained financing from Trustmark for BCGC through false representations. To obtain a judgment that a debt is nondischargeable for false representations, the misrepresentations must *638 have been: (1) knowing and fraudulent falsehoods, (2) describing past or current facts, (3) that were relied upon by the other party. Jacobson v. Ormsby (In re Jacobson) , No. 06-51460, 2007 WL 2141961 , at *2 (5th Cir. July 26, 2007) ; In re Allison , 960 F.2d at 483 ; RecoverEdge L.P. , 44 F.3d at 1292-93 ; Pasagui v. Perez (In re Perez) , No. 14-32266-H5, 2017 WL 991042 , at *7 (Bankr. S.D. Tex. Mar. 13, 2017) ; U.S. Merchs. Fin. Grp., Inc. v. Martin (In re Martin) , No. 15-41103, 2017 WL 1316928 , at *10 (Bankr. E.D. Tex. Apr. 7, 2017). Additionally, Trustmark must prove the amount of its damages. See In re Jacobson , 2007 WL 2141961 , at *2 (affirming district court's affirmance of bankruptcy court's determination that "[plaintiff]'s exhibits correctly reflected the amount of damages owed by [debtor]."). The Court now addresses each of the elements that Trustmark must satisfy.

1. Knowing and Fraudulent Falsehoods

The Debtors committed knowing and fraudulent falsehoods in their dealings with Trustmark. When considering whether a knowing and fraudulent falsehood has been made, the subjective mindset of the promisor is the focus. Higgins v. Nunnelee (In re Nunnelee) , 560 B.R. 277 , 285 (Bankr. N.D. Miss. 2016). "A misrepresentation is fraudulent if the maker ... knows or believes ... the matter is not as represented, or does not have the confidence in the accuracy of his representation as stated or implied, or knows ... he does not have the basis for his representation as stated or implied. Id. (quotations omitted) (citing AT & T Universal Card Servs. v. Mercer (In re Mercer) , 246 F.3d 391 , 407 (5th Cir. 2001) ). A misrepresentation by a debtor of his or her intention to perform contractual duties, for example, may be a false representation under the Code. Manheim Auto. Fin. Servs., Inc. v. Hurst (In re Hurst) , 337 B.R. 125 , 131-32 (Bankr. N.D. Tex. 2005) ; Spoljaric v. Percival Tours, Inc. , 708 S.W.2d 432 , 434 (Tex. 1986) (internal citations omitted) ("A promise to do an act in the future is actionable fraud when made with the intention, design, and purpose of deceiving, and with no intention of performing the act. While a party's intent is determined at the time the party made the representation, it may be inferred from the party's subsequent acts after the representation is made."); Nwokedi v. Unlimited Restoration Specialists, Inc. , 428 S.W.3d 191 , 199 (Tex. App.-Houston [1st Dist.] 2014, pet. denied) ("A promise of future performance constitutes an actionable misrepresentation if the promise was made with no intention of performing at the time the promise was made."). This intent may be inferred from the fact that the debtor failed to take any steps to perform under the contract. In re Hurst , 337 B.R. at 131 ; Nwokedi , 428 S.W.3d at 199 ("The speaker's intent at the time of the representation may be inferred from the speaker's acts after the representation was made.").

Intent is a fact question within the realm of the trier of fact because it is dependent upon the credibility of the witnesses and the weight to be given their testimony .... [B]reach of a promise to perform combined with "slight circumstantial evidence" of fraud constitutes some evidence of fraudulent intent and is legally sufficient to support a verdict.

Nwokedi , 428 S.W.3d at 199 (citation omitted). The debtor's silence regarding a material fact can also constitute a false representation. Selenberg v. Bates (In re Selenberg) , 856 F.3d 393 , 399 (5th Cir. 2017) ; Mora v. Abraham (In re Abraham) , No. 10-03227, 2014 WL 3406513 , at *3 (S.D. Tex. July 7, 2014). "When one has a duty to speak, both concealment and *639 silence can constitute fraudulent misrepresentation; an overt act is not required." In re Selenberg , 856 F.3d at 399 (emphasis in original).

Trustmark asserts that the Debtors had no intention of performing under the Loan Documents as promised because: (1) almost immediately after executing the Loan Documents, the Debtors secretly transferred all of BCGC's assets to Mr. Tegeler, and then to FWM, despite express warranties to refrain from effectuating these transactions without first obtaining Trustmark's written consent; and (2) the Debtors made material misrepresentations of their intention to perform their contractual duties when they submitted to Trustmark a loan application for BCGC in early August of 2014. Indeed, on August 7, 2014-eleven days before the loan closing at Trustmark's offices-the Debtors were already having substantive discussions with Huebel and his attorneys, through Stephens and the Debtors' attorney, to sell BCGC's assets to FWM. [Finding of Fact No. 16]. Yet, the Debtors never informed Trustmark about a sale of BCGC's assets to FWM. 22

On August 18, 2014, the Debtors, acting on behalf of BCGC as its sole officers and owners, in order to obtain a line of credit from Trustmark, attended the loan closing at Trustmark's offices and executed the Revolving Loan Agreement, warranting, representing, and covenanting, in part, that:

(a) "[N]one of the accounts or inventory forming the basis of the collateral securing the Borrower's indebtedness to Trustmark is or will be subject to any other superior liens, security interests or [other] encumbrances." [Finding of Fact No. 19(a) ].

(b) "The borrower will ... [p]romptly notify Trustmark of all material adverse changes in Borrower's financial condition." [Finding of Fact No. 19(c) ].

(c) "Until the note and all other obligations and liabilities of Borrower to Bank are fully paid, Borrower covenants that it will not, without the prior written consent of Bank : (a) Reorganize, merge or consolidate with, or acquire all *640 or substantially all of the assets of any other company, firm or association, or make any other substantial change in its capitalization or character of its business; (b) Purchase or redeem any of its stock; (c) Sell the majority of its assets used or useful in its business , except in the ordinary course of business ...."

[Finding of Fact No. 19(d) ] (emphasis added).

Additionally, on the same date, the Debtors, on behalf of BCGC, in order to obtain a line of credit from Trustmark, executed the Security Agreement, wherein BCGC represented and promised that it would not "sell, offer to sell, or otherwise transfer or dispose of the Collateral." [Finding of Fact No. 20(c) ]. Moreover, the Debtors, on behalf of BCGC, further represented and promised that BCGC would not "pledge, mortgage, encumber or otherwise permit the Collateral to be subject to any lien, security interest, encumbrance or other charge, other than the security interest provided for in the Security Agreement." [ Id. ].

Despite the above-referenced representations, one of the Debtors (i.e., Mr. Tegeler) immediately proceeded to act completely contrary to these representations. Specifically, on August 20, 2014-only two days after the loan closing-Mr. Tegeler, without obtaining written consent from Trustmark, surreptitiously transferred all of BCGC's assets to himself personally by executing the Conveyance. [Finding of Fact No. 26]. Then, one day later, on August 21, 2014, Mr. Tegeler-once again, without obtaining Trustmark's written consent-executed the Asset Purchase Agreement with Huebel and Huebel Ranch to transfer all of BCGC's assets, including all cash, accounts receivable, and inventory, among other assets, to FWM. 23 [Finding of Fact No. 27]. Thus, within forty-eight hours after signing the Loan Documents, Mr. Tegeler proceeded to violate five material provisions of these contracts (i.e., the provisions referred to above). The negotiations that Mr. Tegeler (and his attorney and CPA) conducted with Huebel and FWM's attorneys prior to the loan closing-none of which were disclosed to Trustmark-clearly reflect that Mr. Tegeler had every intention of unilaterally transferring all of BCGC's assets immediately after the loan closing despite *641 representing in the Loan Documents that no such transfer would ever occur without first obtaining Trustmark's written consent. 24 [Finding of Fact No. 16]. By conveying all of BCGC's assets to FWM, Mr. Tegeler: (1) allowed FWM's existing lenders to obtain a lien on these assets by operation of law; 25 (2) materially and adversely changed BCGC's financial condition; and (3) made a substantial change in the character of BCGC's business. These circumstances were direct violations of the representations noted above in the Revolving Loan Agreement and the Security Agreement. This Court finds that Mr. Tegeler's actions do not constitute mere breaches of contracts; they also constitute false representations. He clearly knew, prior to signing the Loan Documents, that he would not be complying with material provisions of the Loan Documents. Indeed, his actions of August 20 and 21, 2014, reflect that he had no intention of performing his contractual duties under the Loan Documents that he had just signed forty-eight hours before. Nwokedi , 428 S.W.3d at 199 ("The speaker's intent at the time of the representation may be inferred from the speaker's acts after the representation was made."); Spoljaric , 708 S.W.2d at 434 (internal citations omitted) ("A promise to do an act in the future is actionable fraud when made with the intention, design, and purpose of deceiving, and with no intention of performing the act. While a party's intent is determined at the time the party made the representation, it may be inferred from the party's subsequent acts after the representation is made."); In re Dunston , 117 B.R. at 640 ("An intent to deceive may logically be inferred from a false representation ... which the debtor knows or should know will induce another individual to part with property or (services).").

There is more. On August 29, 2014, the Debtors delivered to Trustmark a signed loan application on behalf of BCGC. 26

*642 [Finding of Fact No. 33]. The loan application inquires: "Is the collateral being pledged owned by someone other than the business or the owners of the business?" [ Id. ]. The Debtors stated, "No." [ Id. ]. Although the loan application contained information describing the circumstances as of the date of the loan closing-August 18, 2014, two days prior to all of BCGC's assets being transferred to FWM-the Debtors, as of August 29, 2014, knew full well that all of BCGC's assets had in fact been transferred to FWM on August 21, 2014. Hence, by delivering to Trustmark the signed loan application on August 29, 2014, representing that the Collateral was not owned by someone other than BCGC, the Debtors were knowingly leading Trustmark to believe the Collateral was still owned by BCGC when, in fact, it was not. 27 Stated differently, the Debtors made a knowing and fraudulent falsehood.

There is even more. On September 17, 2014, Ms. Tegeler, as an officer of BCGC, signed and submitted to Trustmark a borrowing base certificate expressly representing and warranting that "there does not exist an Event of Default of any event or condition ... under the terms of any agreement between the [Debtors and Trustmark] including, without limitation, any loan agreement, security agreement, deed of trust, note and mortgage." [Finding of Fact No. 36]. This representation was absolutely false, as several defaults did indeed exist under the terms of the Loan Documents by this date. Henson v. First Tower Loan, Inc. (In re Henson) , 103 F.3d 470 , 472 (5th Cir. 1997) (holding that failure to obtain written consent "creates an incident of default"); Harris v. Archer , 134 S.W.3d 411 , 445 (Tex. App.-Amarillo 2004, pet. denied) (holding that when all parties agree to a condition precedent that requires prior written consent, the failure to acquire such written consent results in the consequences stated in the agreement, i.e., a voided transaction).

First, by September 17, 2014, all of the Collateral had been conveyed to FWM, and the security interests of FWM's lenders therefore now attached to the Collateral; hence, the Collateral on which Trustmark had a lien when BCGC owned these assets was now subject to superior liens of FWM's lenders in violation of the Revolving Loan Agreement and the Security Agreement. Liberty Sport Aviation v. Tex. Hill Country Bank , No. 04-15-00480-CV, 2016 WL 4626238 , at *6 (Tex. App.-San Antonio Sept. 7, 2016, pet. denied) ; Franklin Nat'l Bank v. Boser , 972 S.W.2d 98 , 101 (Tex. App.-Texarkana 1998, pet. denied). 28 Thus, Ms. Tegeler's statement was *643 a blatant misrepresentation of an existing fact.

Second, neither BCGC nor the Debtors ever notified Trustmark of any material adverse changes in BCGC's financial condition as they were required to do under the Revolving Loan Agreement. [Finding of Fact No. 36(b)(ii) ]. Yet, by September 17, 2014, BCGC had been drained of all of its assets, as Mr. Tegeler, on August 20, 2014, had executed the Conveyance, transferring these assets to himself (with no consideration given to BCGC), [Finding of Fact No. 26], and then, the next day, transferred these same assets to FWM through his execution of the Asset Purchase Agreement, [Finding of Fact No. 27]. Thus, there was no question that there had been material adverse changes in BCGC's financial condition, as it had become a shell corporation by September 17, 2014. The Debtors' silence about this fact was a misrepresentation on their part. In re Selenberg , 856 F.3d at 399 .

Third, BCGC's assets had been conveyed when Mr. Tegeler-almost immediately after the loan closing-first took title to them and then immediately sold them to FWM. [Finding of Fact Nos. 26-27]. Yet, BCGC (or, more accurately, the Debtors, as officers of BCGC) never obtained prior written consent from Trustmark for these transfers of BCGC's assets, as required by the Revolving Loan Agreement. [Finding of Fact No. 35-36]. Thus, as of September 17, 2014, there were multiple defaults that had occurred, and yet the Debtors failed to disclose any of these defaults to Trustmark when Ms. Tegeler submitted the borrowing base certificate to Trustmark. Rather, she represented on this certificate that there were no defaults when she knew-or is charged with knowing-that there were at least three defaults. Espinoza v. Cargill Meat Sols. Corp. , 622 F.3d 432 , 441 (5th Cir. 2010) ("Texas law charges a person with knowledge of the contents of a document he or she signs.").

In response to Trustmark's allegations, the Debtors contend that Trustmark was aware all along of the Debtors' intentions to have BCGC merge with FWM, and therefore should have known that BCGC's assets would be conveyed to FWM. Although the Debtors have not provided any credible evidence to prove that Trustmark was aware of this so-called "merger" at the time the Loan Documents were executed on August 18, 2014, or on September 18, 2014, when Trustmark actually advanced $230,000.00 to BCGC, the Debtors have provided evidence to support their contention of Trustmark's awareness three months later of the transaction between BCGC and FWM. [Finding of Fact Nos. 23, 36, 46]. Specifically, the Debtors contend that Trustmark had actual knowledge of the transaction because of an e-mail dated November 17, 2014, from Petrilla to Ms. Tegeler, requesting FWM's tax identification number. [Finding of Fact No. 46]. 29 Ms. Tegeler replied to this e-mail and provided FWM's tax identification number, and she requested a meeting to *644 discuss the borrowing base report due to the purported merger between BCGC and FWM. [ Id. ].

There is no question that by November 17, 2014, Petrilla knew that some type of transaction had taken place between BCGC and FWM. Indeed, Petrilla first learned about FWM's existence in November 2014 during a phone call she had with Ms. Tegeler. [Finding of Fact No. 45]. Petrilla, surprised to hear this information, nevertheless made an effort to determine whether Trustmark could enter into a lender-borrower relationship with FWM. However, upon learning more details about what actually happened-namely, the surreptitious conveyance on August 20, 2014, of all of BCGC's assets to Mr. Tegeler, and then the secret transfer of these assets on August 21, 2014, to FWM in exchange for Mr. Tegeler acquiring a 50% interest in FWM-Petrilla concluded that she should refer the BCGC loan file to her supervisor, Cook.

These circumstances in no way substantiate the Debtors' contention that Trustmark has known all along that BCGC would be-to use Ms. Tegeler's word-"merging" with FWM. Just the opposite: Petrilla's actions reflect that neither she, nor anyone else at Trustmark, was informed about the transactions that occurred on August 20, 2014, and August 21, 2014, and that once she discovered what had happened, she realized the seriousness of the situation because: (1) the Debtors, on behalf of BCGC, had failed to obtain Trustmark's prior written consent to transfer BCGC's assets, as required by the Loan Documents; and (2) Ms. Tegeler had provided a false borrowing base certificate on September 17, 2014, representing that BCGC had accounts receivable of $389,324.00 when, in fact, by this date, BCGC had no assets whatsoever.

For all of the above-referenced reasons, Trustmark has met its burden of establishing that the Debtors committed knowing and fraudulent falsehoods.

2. The Debtors Described Past or Current Facts

The Fifth Circuit has explained that "a promise to perform acts in the *645 future is not considered a qualifying misrepresentation merely because the promise subsequently is breached." In re Allison , 960 F.2d at 484 . "A debtor's misrepresentations of his intentions, however, may constitute a false representation within the meaning of the dischargeability provision if, when the representation is made, the debtor has no intention of performing as promised." Metz v. Bentley (In re Bentley) , 531 B.R. 671 , 688 (Bankr. S.D. Tex. 2015) (quoting In re Allison , 960 F.2d at 484 ). Additionally, the Fifth Circuit has further noted that misrepresentations concerning a past or "current fact of his future intention " will satisfy this element. In re Allison , 960 F.2d at 484 (emphasis added).

Trustmark asserts that the Debtors' misrepresentations in the Loan Documents describe past or current facts. The Debtors contend that the representations made in these documents pertain to future facts, and not past or current facts. This Court disagrees with the Debtors.

The Debtors executed the Loan Documents knowing full well that they would-within a few days-sell, transfer, deliver, and convey Trustmark's Collateral from BCGC to Mr. Tegeler, and then from Mr. Tegeler to FWM, without obtaining prior written consent from Trustmark. [Finding of Fact Nos. 26-27]. After all, the Debtors-without any disclosure whatsoever to Trustmark for the three weeks leading up to the loan closing held on August 18, 2014-had conducted negotiations with FWM and its attorneys, and they knew prior to executing the Loan Documents that contrary to the representations made therein (including that BCGC would not convey its assets without written consent from Trustmark), Mr. Tegeler would soon be executing the Conveyance and the Asset Purchase Agreement to transfer all of BCGC's assets to FWM. 30 Under these circumstances, the Court finds that the representations made in the Loan Documents are representations that the Debtors had no intention of performing as promised.

Additionally, Trustmark contends that Ms. Tegeler made false representations of current facts by representing in the borrowing base certificate that BCGC had eligible accounts receivable as of September 17, 2014, of $389,324.00, when, in fact, BCGC had absolutely no assets as of that day because Mr. Tegeler, in August 2014, had already executed the Conveyance and the Asset Purchase Agreement to ensure that all of BCGC's assets (including its accounts receivable) were transferred to FWM. [Finding of Fact No. 36-37]. The representation in the borrowing base certificate that BCGC had eligible accounts receivable of $389,324.00 as of September 17, 2014, was unquestionably a representation-which was blatantly false-describing current facts. Trustmark has therefore satisfied its burden in this respect.

Case law supports this conclusion. In Third Coast Bank , the district court affirmed the bankruptcy court's ruling that the debtor's debt to a lender was nondischargeable under § 523(a)(2)(A) because the debtor had knowingly submitted borrowing base certificates containing false information about inventory values upon *646 which the lender relied to advance loan proceeds. Cohen v. Third Coast Bank, SSB , No. 1:13-CV-610, 2014 WL 2729608 , at *8-9 (E.D. Tex. June 13, 2014). If Third Coast Bank is not a "white horse" case given the facts in the suit at bar, then it is at least a "grey mule." Other cases also support this interpretation. See, e.g. , Bandi v. Becnel (In re Bandi) , 683 F.3d 671 , 676 (5th Cir. 2012) (holding that a misrepresentation about the "general overall financial condition of an entity or individual" is within the scope of a false misrepresentation under § 523(a)(2) ); In re Kakde , 382 B.R. at 420-21 (holding that falsities on a borrowing base certificate issued by debtor were materially false statements).

Aside from the misrepresentations about the conveyance of BCGC's assets and the false information in the borrowing base certificate, the Debtors also misrepresented how the proceeds advanced under the Note would be used. In Jacobson , the borrower represented to the lender that he would use any loan proceeds advanced by the lender for a specific purpose. Jacobson v. Ormsby (In re Jacobson) , No. 04-51572-RBK, 2006 WL 2796672 , at *10 (W.D. Tex. Sept. 26, 2006). Subsequently, the borrower immediately spent the loan proceeds to pay "existing debts or other obligations [unrelated to the specific purpose], which left no remaining funds" for that specific purpose. Id. The court held that the borrower's representations described past or current facts, and not future facts; and therefore, the debt was held to be nondischargeable under § 523(a)(2)(A). Id. ; see also Kan. Nat'l Bank & Trust Co. v. Kroh (In re Kroh) , 88 B.R. 972 , 984 (Bankr. W.D. Mo. 1988) ("Further, the testimony of the Bank's officers clearly supports the Court's finding that the Bank relied on the misrepresentations made by [the debtor] concerning use of the loan proceeds. The Bank was assured orally at least twice and in writing that the loan proceeds were to be used for the brothers' personal investment.").

Like the borrower in Jacobson , the Debtors, in their first meeting with Petrilla and in their loan application, stated that the loan proceeds were to be used to help fund BCGC's relocation, restructure of operations, general working capital, and operating expenses. [Finding of Fact No. 13(d) ]. Instead, the Debtors used all of the loan proceeds of $230,000.00 to pay for FWM's working capital and operating expenses. [Finding of Fact No. 41]. Not one dime was spent on BCGC. This is because contrary to what the Debtors repeatedly represented to Trustmark, they never intended BCGC's line of credit to be used for BCGC's operations. Rather, they intended all along that any loan proceeds advanced under the Loan Documents would be used for FWM's operations. Indeed, this is why Huebel insisted that the Debtors had to procure a line of credit facility before any transaction between FWM and BCGC would be consummated. This is also why the Debtors made no disclosure to Trustmark about their ongoing negotiations with Huebel and FWM's attorney prior to the loan closing of August 18, 2014. [Finding of Fact Nos. 13(d), 15]. Indeed, that is why, when FWM's attorney was requesting the Debtors to obtain a waiver from Trustmark about the contemplated conveyance of assets by BCGC to FWM, Ms. Tegeler told Stephens that such a request would "raise red flags"-which led the Debtors to convince FWM to delete this waiver procurement provision in the Asset Purchase Agreement. 31 The Debtors most assuredly did *647 not want Trustmark to know that all loan proceeds would be used for FWM's operations, as they knew that Trustmark would not establish the line of credit facility for BCGC and advance funds thereunder if it knew that the loan proceeds would be used by some entity other than BCGC (i.e., other than Trustmark's borrower). The Debtors no doubt breathed a sigh of relief when this provision was deleted: they consummated the Asset Purchase Agreement with FWM, which gave Mr. Tegeler a 50% stock interest in FWM; and they kept Trustmark completely in the dark about their intention to use all loan proceeds advanced under the Note solely for FWM's benefit. This Court finds that the Debtors' representations that the proceeds advanced under the Loan Documents would be used for BCGC's operations were representations describing current facts; indeed, like the debtor in Jacobson , the Debtors here immediately spent the loan proceeds by transferring them to FWM to pay for FWM's operational expenses and salaries. [Finding of Fact No. 41].

Thus, for all of the above-referenced reasons, this Court concludes that Trustmark has satisfied its burden and finds that the Debtors' representations described past or current facts.

3. Trustmark Relied Upon the Debtors' False Representations

The final element to obtain a judgment that a debt is nondischargeable for false representations is the necessity that Trustmark relied on the Debtors' representations. Field v. Mans , 516 U.S. 59 , 74, 116 S.Ct. 437 , 133 L.Ed.2d 351 (1995) ; In re Bandi , 683 F.3d at 675 . Petrilla very credibly testified at trial that Trustmark relied upon the oral representations of the Debtors made at their initial meeting and the written representations made in the loan application, the Loan Documents, and the borrowing base certificate to establish the line of credit facility and to actually fund $230,000.00 under this facility. [Finding of Fact No. 14]. Because Trustmark's claim is brought under § 523(a)(2)(A), the test is whether Trustmark justifiably relied-as opposed to reasonably relied-upon the representations made by the Debtors. Field , 516 U.S. at 70 , 116 S.Ct. 437 ; see also Sanford Inst. for Sav. v. Gallo , 156 F.3d 71 , 74 (1st Cir. 1998) ("The rationale for placing this relatively low burden on the victim of the misrepresentation is rooted in the common law rule that the victim's contributory negligence is not a defense to an intentional tort."). As Third Coast Bank points out, "justifiable reliance does not impose a duty to investigate unless the falsity of the representation is readily apparent or obvious, or there are 'red flags' indicating that reliance is unwarranted." 2014 WL 2729608 , at *9. A creditor has no duty to investigate a debtor's representation, unless the "falsity *648 of the representation is readily apparent." Guion v. Sims (In re Sims) , 479 B.R. 415 , 425 (Bankr. S.D. Tex. 2012) (citing Field , 516 U.S. at 70 -71 , 116 S.Ct. 437 ); see also In re Minardi , 536 B.R. at 187-88 ("Justifiable reliance does not require a plaintiff to demonstrate reasonableness nor does it impose a duty to investigate unless the falsity is readily apparent."). To determine whether a creditor justifiably relies on a misrepresentation, the court must examine the "circumstances of a particular case and the characteristics of a particular plaintiff, [and] not ... an objective standard." In re Sims , 479 B.R. at 425 ; see also In re Minardi , 536 B.R. at 187 (emphasis in original) (citation omitted) ("Justifiable reliance requires proof that a plaintiff actually relied upon the defendant's false representations and that such reliance was justified under the circumstances.").

Trustmark asserts that it justifiably relied on the oral representations the Debtors made at their initial meeting with Petrilla, and, additionally, justifiably relied upon the written representations made in the loan application, the Loan Documents, and the borrowing base certificate. Specifically, Trustmark asserts that at the time the Debtors executed all of the Loan Documents (on August 18, 2014), it had no reason to suspect that the Debtors would be conveying away all of BCGC's assets within forty-eight hours of the loan closing. After all, at their initial meeting the Debtors informed Petrilla that the purpose of the loan was to provide working capital for BCGC, leaving Petrilla to believe that BCGC would continue to be an operational entity, not a shell corporation. [Finding of Fact No. 13(d) ]. Moreover, the only information that the Debtors gave to Trustmark to evaluate in its loan review process was information about BCGC. [Finding of Fact No. 14]. Indeed, the loan application itself refers only to BCGC as the prospective borrower; there was no reference to FWM. [ Id. ]. Further, during the period that Trustmark was evaluating the information that the Debtors had given to it about BCGC, the Debtors never once disclosed to Trustmark the fact that they were carrying on substantive discussions with Huebel and FWM's attorneys about FWM acquiring all of BCGC's assets. [Finding of Fact Nos. 15-16]. Additionally, at the loan closing, when the Debtors signed all of the Loan Documents, they did not say one word about FWM to Trustmark. [Finding of Fact No. 23]. Under all of these circumstances, the Court finds that Trustmark justifiably relied upon the representations that the Debtors made orally to it at the face-to-face meeting with Petrilla in early August of 2014 as well as the written representations made in the completed loan application and Loan Documents executed on August 18, 2014. There were simply no "red flags" that would have required Trustmark to further investigate whether the Debtors' representations might be inaccurate and therefore should not be relied upon. Moreover, Stephens had previously referred prospective borrowers to Trustmark, and there is no evidence that Trustmark had experienced any issues of dishonesty or lack of integrity with these individuals. Here, Trustmark had a track record with Stephens' referred borrowers that gave it some level of comfort about the Debtors that it otherwise might not have had.

Further, there was nothing indicated on the face of the borrowing base certificate given to Trustmark on September 17, 2014, that revealed any falsehoods or abnormalities. Third Coast Bank , 2014 WL 2729608 , at *4, *10-11 (affirming bankruptcy court's nondischargeability judgment under § 523(a)(2)(A) for false representations on the grounds that the borrowing base certificates provided and certified by the debtor as correct by the *649 debtor "were largely untrue"). As of September 17, 2014, Trustmark had no idea or information that Mr. Tegeler had already conveyed BCGC's assets (including its accounts receivable) to FWM, thereby leaving BCGC as nothing more than a shell corporation. [Finding of Fact No. 36]. Indeed, the Debtors had not provided Trustmark with a copy of the Conveyance or the Asset Purchase Agreement (which memorialized the transfers of BCGC's assets the previous month) nor had the Debtors verbally informed Trustmark about these two transactions. [Finding of Fact Nos. 26, 32]. Moreover, Ms. Tegeler expressly represented in the borrowing base certificate that there were no defaults under the Loan Documents [Finding of Fact No. 36], which of course meant, among other things, that there had been no conveyance of BCGC's assets to any third party. Thus, when Ms. Tegeler delivered the borrowing base certificate to Trustmark on September 17, 2014, representing that BCGC had accounts receivable of $389,324.00, there were no red flags that Trustmark should have seen to lead it to believe that it should investigate before actually advancing funds to BCGC as requested by Ms. Tegeler. 32 The only action that Trustmark took-and it was certainly legitimate and in the ordinary course of any lending institution's business-was to do some mathematical calculations in order to determine the exact amount of "eligible accounts receivable" under the Loan Documents so that the exact amount of the loan proceeds could be determined and wire transferred into BCGC's account. [Finding of Fact Nos. 39-40]. Under all these circumstances, the Court finds that Trustmark justifiably relied upon the figures and representations made by Ms. Tegeler in the borrowing base certificate.

The Debtors contend that Trustmark did not justifiably rely on any of the above-referenced *650 representations because Trustmark knew about the so-called "merger" between BCGC and FWM. Trustmark strongly disagrees. This Court rejects the Debtors' position for the following reasons.

First, the Debtors assert that at their initial meeting with Petrilla in early August of 2014, they informed her about the "merger" with FWM. Petrilla has denied that they did so, and this Court has already found her testimony to be more credible than the testimony of the Debtors on this point. See Credibility Section. Thus, this Court has found that no such disclosure was ever made at this initial meeting. Accordingly, the Court rejects the Debtors' argument that Trustmark knew about the so-called "merger" prior to the loan closing, as the Debtors have simply failed to introduce any credible evidence that Trustmark had such information. Indeed, as this Court has already noted, both the Debtors and Stephens admitted at trial, that for the several days leading up to the August 18, 2014, loan closing, they provided no information (orally or in writing) to Trustmark about their negotiations with FWM. It simply strains credulity to believe the Debtors' version that they told Petrilla about FWM at their initial meeting, but then told her absolutely nothing thereafter about the multi-day negotiations with FWM's owner and attorneys. The fact is that they told her nothing at the initial meeting about any "merger." 33

Second, the Debtors argue that Trustmark knew about the "merger" by drawing the Court's attention to e-mail exchanges between Ms. Tegeler and Petrilla discussing the so-called "merger" in November 2014. There is no question that this e-mail illustrates that, by November of 2014 , Trustmark had knowledge of FWM owning BCGC's Collateral and that some type of transaction between BCGC and FWM had occurred. [Finding of Fact No. 46]. However, the Debtors want this Court to use this fact to make a finding that Trustmark knew, even prior to the loan closing *651 of August 18, 2014, about FWM's existence and the transaction that BCGC negotiated with FWM. This, the Court will not do. The evidence is clear that Petrilla first learned about FWM's existence in November 2014 during a phone call she had with Ms. Tegeler. [Finding of Fact No. 45]. Petrilla had made the call to inquire why BCGC had failed to submit the monthly borrowing base certificates for September 30, 2014, and October 31, 2014, as required by the Loan Documents, and during this call, Ms. Tegeler responded that BCGC had "merged" with FWM. [ Id. ]. Because this Court finds Petrilla's testimony very credible, this means the earliest Trustmark could have known about the "merger" with FWM was November 2014. Thus, the finding that this Court makes is that when Trustmark established the line of credit facility on August 18, 2014, and when it actually advanced funds of $230,000.00 under the Note on September 18, 2014, Trustmark had no knowledge of FWM or any transactions that it had effectuated with BCGC. Given this timeline, the Court finds that Trustmark justifiably relied upon all of the representations made by the Debtors from their initial meeting in August of 2014 through the delivery of the borrowing base certificate on September 17, 2014. 34

4. The Debtors' Conduct Caused Damage to Trustmark

There is no question that the Debtors' conduct caused damage to Trustmark. Not only did the Debtors deprive Trustmark of the funds it loaned to BCGC by deliberately signing loan documents containing provisions they had no intention of complying with, they also intentionally submitted a borrowing base certificate that was patently false knowing that Trustmark would rely upon it to advance funds to a corporation (BCGC) that no longer had any assets to secure the advance. The Debtors also deprived Trustmark from foreclosing on its lien on the Collateral to recover the $230,000.00 because they conveyed all of BCGC's assets to FWM, thereby allowing FWM's lenders to take a lien on these assets and effectively eviscerate Trustmark's lien, which in turn made the $256,716.54 Debt an unsecured loan. [Finding of Fact No. 52-53, 55]; see DZ Bank AG Deutsche Zentral-Genossenschaft Bank v. Meyer , 869 F.3d 839 , 843 (9th Cir. 2017) (holding that debtor's transfer, initiated as owner, from one corporation to another caused damage to the bank's interest because the bank no longer had assets on which to foreclose). In fact, Lone Star Bank and Mainland Bank (FWM's lenders) declared a default under their respective loan agreements with FWM, and thereafter repossessed and liquidated FWM's assets, including the assets on which Trustmark had a lien, i.e., the Collateral. [ Id. ]. Trustmark was left holding a non-performing loan with a principal balance of $230,000.00 from a borrower *652 (BCGC) who, having given a lien to Trustmark on its assets to secure the loan, then ensured that this lien was eviscerated. But for the skullduggerous actions of the borrower's principals-i.e., the Debtors-Trustmark would have suffered no harm. Therefore, the Debtors undeniably caused damage to Trustmark. In re Kroh , 88 B.R. at 984 ("The Bank has been damaged in the amount of the unpaid balance on each note, the interest accrued on the notes, and the attorney's fees incurred. Absent, [the debtor's] misrepresentations the Bank would not have loaned the money to [the debtor] and these damages would not have occurred.").

In sum, Trustmark has met its burden in establishing all of the elements of a claim for false representations. Therefore, this Court finds that the $256,716.54 Debt is nondischargeable. The Court now addresses Trustmark's claim for false pretenses.

H. Trustmark's Claim under § 523(a)(2)(A) for False Pretenses

Trustmark's second claim against the Debtors is based upon § 523(a)(2)(A) for false pretenses. Trustmark contends that the following conduct of the Debtors constitutes false pretenses: (1) their actions taken to establish the line of credit facility at the August 18, 2014, closing; (2) their actions taken on September 17, 2014, to obtain a drawdown of $230,000.00 under the line of credit facility on September 18, 2014; and (3) their actions taken to transfer the loan proceeds of $230,000.00 from BCGC's account to FWM's account on September 19, 2014, November 5, 2014, and November 20, 2014.

To obtain a judgment that a debt is nondischargeable for false pretenses, the creditor must show that: (1) the debtor engaged in conduct "wronging one in his property rights by dishonest methods or schemes [such as] deprivation of something of value by trick, deceit, chicane[ry] or overreaching;" (2) there was scienter or intent; (3) causation; and (4) damages. Novartis Corp. v. Luppino (In re Luppino) , 221 B.R. 693 , 701-02 (Bankr. S.D.N.Y. 1998). "While false pretenses and false representation both involve intentional conduct intended to create and foster a false impression, the distinction is that a false representation involves an express statement, while a claim of false pretenses may be premised on misleading conduct without an explicit statement." In re Minardi , 536 B.R. at 187 (quotation omitted). Further, a false pretense "involves implied misrepresentation or conduct intended to create and foster a false impression ...." Leeb v. Guy (In re Guy) , 101 B.R. 961 , 978 (Bankr. N.D. Ind. 1988). The Court now addresses each of the elements that Trustmark must satisfy. 35

*653 1. The Debtors' Dishonest Conduct Injured Trustmark's Property Interest: Namely, its Lien on the Collateral

The Debtors' dishonest conduct prior to the loan closing resulted in injury to Trustmark's security interest. In late July or early August of 2014, the Debtors and Stephens had their initial meeting with Petrilla to discuss obtaining a line of credit to help fund BCGC's relocation, restructure of operations, general working capital, and operating expenses. [Finding of Fact No. 13(d) ]. Importantly, the Debtors only indicated the need for financing for BCGC, and not for BCGC and FWM-or solely for FWM . [ Id. ]. They made no disclosures whatsoever about FWM in this meeting, and the loan application that they filled out and submitted soon thereafter stated that the proposed borrower was BCGC and that the purpose of the loan was to fund BCGC's operations. [ Id. ]. The loan application made no reference at all to FWM. [Pl.'s Ex. No. 13 at 9]. The Debtors led Trustmark to believe that the loan proceeds were to be used solely for BCGC's operations. [ Id. ; Finding of Fact No. 13(d) ]. Yet, while Trustmark was considering BCGC's loan application during the first two weeks of August 2014, the Debtors, and their agents (Stephens and LeBlanc) were conducting substantive negotiations with FWM's principal (Huebel) and attorneys (Dinerstein and Bethea) concerning a sale of all of BCGC's assets to FWM; the Debtors said absolutely nothing to Trustmark about these communications. [Finding of Fact No. 15]. The Debtors had a duty to not only verbally disclose to Trustmark at the initial meeting their true intention regarding the transfer of BCGC's assets to FWM and the use of the loan proceeds for FWM's operations, but they also should have made such disclosure in the loan application itself. See Check Control, Inc. v. Anderson (In re Anderson) , 181 B.R. 943 , 950 (Bankr. D. Minn. 1995) (citation omitted) (noting that false pretenses can also consist of "silence when there is a duty to speak"); Minority Equity Capital Corp. v. Weinstein (In re Weinstein) , 31 B.R. 804 , 810 (Bankr. E.D.N.Y. 1983) (stating when finding that debtor's conduct amounted to false pretenses, that "[c]ase law has additionally gone so far as to extend an affirmative duty to a party in a business transaction to disclose all the facts the concealment of which would mislead the other side."). Their silence was deafening. The Debtors' failure to make these disclosures to Trustmark led Trustmark to believe that BCGC was the only borrower and BCGC's assets constituted the only collateral. Indeed, Trustmark drafted the Loan Documents to reflect that BCGC was the only borrower and that BCGC's assets constituted the only collateral.

The Debtors then went to the loan closing on August 18, 2014, and signed the Loan Documents while continuing to say nothing about their negotiations with FWM, all of which led Trustmark to believe that: (1) its only borrower was BCGC; (2) any proceeds funded under the Note would be used for solely BCGC's operations; (3) any advances requested by the Debtors under the Note would be based upon eligible accounts receivable actually owned by BCGC; and (4) any outstanding balance under the Note was well secured by the Collateral. The Debtors' conduct was dishonest and harmed Trustmark because: (1) Trustmark did not have an opportunity to individually evaluate FWM's credit-worthiness; (2) Trustmark did not have any other opportunities to otherwise protect its security interest in *654 the Collateral; (3) Trustmark did not have an opportunity to obtain a personal guaranty from Huebel prior to the loan closing; and (4) when FWM's lenders eventually foreclosed on all of FWM's assets-which, by that time, included the Collateral-Trustmark's collateral position was completely destroyed, rendering the $230,000.00 principal balance owed under the Note to be an unsecured debt. Stated differently, the Debtors' deceitful conduct through the first eighteen days of August of 2014 deprived Trustmark of its right to know to whom it was truly lending the money, the intended purpose of the loan, and how to properly secure the repayment of the loan-all of which eventually resulted in Trustmark being duped into advancing $230,000.00 as an unsecured loan that has never been repaid. The Court finds that the Debtors' conduct was dishonest and falls within the parameters of "false pretenses." In re Dunston , 117 B.R. at 641 ("This Court construes 'false pretense' in the context of Section 523(a)(2)(A) to mean, generally, a series of events, activities or communications which, when considered collectively, create a false and misleading set of circumstances, or false and misleading understanding of a transaction, in which a creditor is wrongfully induced by the debtor to transfer property or extend credit to the debtor.").

The Debtors' deceptive conduct continued after the loan closing. Only forty-eight hours after the loan closing, Mr. Tegeler conveyed all of BCGC's assets (i.e., the Collateral) to himself and then the next day, he transferred these same assets to FWM. [Finding of Fact Nos. 26-27]. Neither the Debtors nor their advisors/agents, Stephens and LeBlanc, nor anyone else informed Trustmark of these transactions or provided Trustmark with a copy of the Conveyance or the Asset Purchase Agreement evidencing the transfer of the assets to FWM. [Finding of Fact No. 32]. Had the Debtors done so, Trustmark-which had not yet actually advanced any proceeds under the Note-would have discovered that its Collateral had been conveyed away, which of course would have led Trustmark to legitimately deny any request to advance any monies under the Note. 36 While Mr. Tegeler testified-at least at some points during trial-that he did not read the Asset Purchase Agreement, he knew, or should have known, that the conveyance of all of BCGC's assets-to either himself or FWM, [Finding of Fact Nos. 26-27]-would result in a default of the Loan Documents unless he first obtained Trustmark's written consent for such a transfer, [Finding of Fact Nos. 19, 30]. See Espinoza , 622 F.3d at 441 ("Texas law charges a person with knowledge of the contents of a document he or she signs."); Venture Cotton Coop. v. Freeman , 494 S.W.3d 186 , 199 (Tex. App.-Eastland 2015, no pet.) ("A party is bound to the contract he signs regardless of whether he read it ...."); Donovan v. Mercer , 747 F.2d 304 , 308 n.4 (5th Cir. 1984) (recognizing the "long standing and generally accepted principle of contract law that, absent fraud or mental incompetence, a person who intentionally signs a document is bound by its contents, whether or not he in fact read the document."); Master Fin., Inc. v. DeJulio (In re DeJulio) , 322 B.R. 456 , 462 (Bankr. M.D. Fla. 2005) ("failure to read ... constitutes at a minimum a reckless indifference and disregard *655 of the information readily available"). Yet, he failed to obtain such consent-despite the fact that Dinerstein (one of FWM's attorneys), in early August of 2014, brought to the Debtors' attention that they would need to obtain a waiver of the default provisions from Trustmark. 37 [Finding of Fact No. 16(e) ]. At trial, the Debtors both admitted that they did not contact Trustmark to obtain waivers of any of the default provisions under the Loan Documents. [Finding of Fact No. 23]. Rather, deliberately keeping Trustmark totally in the dark, the Debtors transferred the Collateral to FWM so that Mr. Tegeler would receive a 50% stock interest in FWM. [Finding of Fact No. 26-28]. This Court finds that when the Debtors represented to Trustmark that the loan was for the purpose of funding BCGC's operations and that BCGC would not transfer its assets without Trustmark's consent, the Debtors knew that the loan proceeds would be used for FWM's operations and that without obtaining Trustmark's consent, they would be conveying the Collateral to FWM in exchange for Mr. Tegeler receiving 50% of FWM's stock. The Debtors had a duty to disclose these facts to Trustmark and obtain its written consent before proceeding with the conveyance of the Collateral, but they chose not to do so. Phillips 66 Co. v. Miltenberger (In re Miltenberger) , 538 B.R. 547 , (Bankr. E.D. Mo. 2015) (quotation omitted) ("[W]hen the circumstances imply a particular set of facts, and one party knows the facts to be otherwise, that party may have a duty to correct what would otherwise be a false impression. This is the basis of the 'false pretenses' provision of Section 523(a)(2)(A)."); In re Weinstein , 31 B.R. at 810 ("Case law has additionally gone so far as to extend an affirmative duty to a party in a business transaction to disclose all the facts the concealment of which would mislead the other side."); In re Hurst , 337 B.R. at 133 ("Put simply, if Party 1 is under a mistaken impression as to the truth of a set of facts and Party 2 is aware of the truth and of the mistaken impression, Party 2 is under a duty to correct that mistake prior to the consummation of the transaction."). The Debtors' chicanery deprived Trustmark of its right to protect its lien on the Collateral and prevent the ultimate foreclosure sales by FWM's lenders of this Collateral, thereby eviscerating Trustmark's security interest.

Aside from the Debtors' concealment of the truth about the conveyance of the Collateral to Mr. Tegeler on August 20, 2014, and to FWM on August 21, 2014, the Debtors also falsely led Trustmark to believe that BCGC still owned the Collateral: (1) when they delivered the signed loan application on August 29, 2014, to Trustmark expressly representing in writing that the Collateral was not "owned by someone other than the business or the owners of the business" when, in fact, just eight days before, they had orchestrated the transfer of all of these assets to FWM; 38 and (2) when Ms. Tegeler submitted *656 a blatantly inaccurate borrowing base certificate to Trustmark for the purpose of obtaining an advance under the Note. Specifically, on or about September 17, 2014-i.e., thirty days after the loan closing, twenty-eight days after Mr. Tegeler conveyed all of the assets from BCGC to himself pursuant to the Conveyance, and twenty-seven days after Mr. Tegeler personally conveyed all of these same assets to FWM pursuant to the Asset Purchase Agreement-Ms. Tegeler, in her capacity as an officer of BCGC, submitted a borrowing base certificate to Trustmark in order to effectuate a drawdown under the Note. [Finding of Fact No. 36]. This borrowing base certificate, which she signed on September 17, 2014, represented to Trustmark that as of September 17, 2014, BCGC had total accounts receivable of $457,207.00, of which $67,883.00 were outstanding for more than ninety days, thereby leaving total eligible accounts receivable to be $389,324.00. [Finding of Fact No. 37; Pl.'s Ex. No. 7; see Adv. Doc. No. 50, p. 4 of 9]. In fact, this representation was blatantly false, as Mr. Tegeler had conveyed all of BCGC's receivables, along with all of the company's other assets, almost a month before to FWM. [Finding of Fact Nos. 27, 36(b)(ii) ]. Trustmark, not having been told by the Debtors about the conveyance to FWM, relied upon the borrowing base certificate representation in proceeding to advance $230,000.00 to BCGC by wire transferring these proceeds to BCGC's bank account on September 18, 2014. [Finding of Fact Nos. 38-40].

In fact, the deception by the Debtors was particularly egregious because of the express representations about the receivables made in the borrowing base certificate upon which Trustmark relied:

To the best of our knowledge and belief , there have been no changes in the amounts stated above since the date of calculation which would cause the present balance of accounts and inventory to be less than the amount necessary to comply in all respects with this Certificate. We hereby affirm, represent and warrant to you the following as of the date hereof:

(1) there does not exist an Event of Default of any event or condition which, with notice of lapse of time, or both, would constitute an Event of Default under the terms of any agreement between us, including, without limitation, any loan agreement, security agreement, deed of trust, note and mortgage; (2) that all the representations and warranties previously given to you were correct when made and are reaffirmed as correct now; and (3) that we are in compliance with all terms, covenants and conditions of all agreements between us.

We hereby confirm to you that all of the above accounts, whether now owned or hereafter arising or acquired including but not limited to each and every account furnished to you under the provision *657 of the Security Agreement, and all proceeds thereof and all liens, and securities, guarantees, remedies, and privileges pertaining hereto are, and heretofore have been assigned to you, and are and have been subject to a security interest in your favor, and have accordingly marked our records to reflect same.

[Pl.'s Ex. No. 13 (emphasis added); Finding of Fact No. 36]. 39 This language, together with the Debtors' continued silence about FWM's existence and the transfer of the Collateral to FWM, created a false picture of reality upon which Trustmark relied in advancing $230,000.00 under the Note on September 18, 2014. The false representations upon which Trustmark relied were material. First, contrary to the representation in the borrowing base certificate that "there have been no changes in the amounts stated above since the date of calculation which would cause the present balance of accounts ... to be less than the amount necessary to comply in all respects with this Certificate," in fact there had been a huge change-as BCGC's accounts receivable had declined to zero on the date Mr. Tegeler executed the Conveyance conveying these receivables (and all of BCGC's other assets to himself). [Finding of Fact No. 36]. Second, contrary to the representation in the borrowing base certificate that "there does not exist an Event of Default of any event or condition which ... would constitute an Event of Default under the terms of any agreement" in fact there had been several Events of Default, including the following:

1. The accounts forming the basis of the Collateral securing BCGC's indebtedness to Trustmark had become subject to superior liens, security interests, or other encumbrances-i.e., FWM's lenders had obtained liens on the Collateral by operation of law once these assets were transferred by Mr. Tegeler to FWM on August 21, 2014. [Finding of Fact No. 36(b)(i) ].

2. The Debtors, on behalf of BCGC, did not notify Trustmark of all material adverse changes in BCGC's financial condition. [Finding of Fact No. 36(b)(ii) ]. Such a change had occurred when Mr. Tegeler, on August 20, 2014, conveyed all of BCGC's assets to himself for no consideration.

3. Mr. Tegeler, without the prior written consent of Trustmark, had transferred all of BCGC's assets used or useful in its business, and these transfers were not in the ordinary course of BCGC's business. [Finding of Fact No. 36(b)(iv) ].

4. Mr. Tegeler, on behalf of BCGC, had sold, offered to sell, and otherwise transferred and disposed of the Collateral by conveying these assets to himself on August 20, 2014, and then transferring these same assets to FWM the next day. [Finding of Fact No. 26-27].

5. Mr. Tegeler (and therefore BCGC) had subjected the Collateral to liens, security interests, encumbrances, and other charges, other than the security interest provided for in the Security Agreement. [Finding of Fact No. 20(c) ]. Specifically, by transferring the Collateral to FWM, Mr. Tegeler allowed the security agreements of FWM's existing lenders to obtain liens on the Collateral. 40

*658 6. The Debtors, as guarantors of any balance owed under the Note, failed to keep Trustmark adequately informed of any facts, events, or circumstances which might in any way affect the Debtors' risks under the Guaranties. [Finding of Fact No. 21(b) ]. Here, by denuding BCGC, the value of Mr. Tegeler's stock interest (which was community property, and therefore affected Ms. Tegeler's community property interest) declined because BCGC no longer had any assets or any cash flow to pay the salaries of Mr. Tegeler and Ms. Tegeler. 41 These circumstances were harmful to the personal financial condition of Mr. and Ms. Tegeler, as guarantors of the Note, and they failed to notify Trustmark of these conditions.

Additionally, contrary to representation in the borrowing base certificate that "we are in compliance with all terms, covenants, and conditions of all agreements between us," in fact, the Debtors, as representatives of BCGC, and in their individual capacities, were not in compliance with the Loan Documents. [Finding of Fact No. 36].

The submission of the above-referenced materially false borrowing base certificate, together with the Debtors' complete silence about the Conveyance and the Asset Purchase Agreement, constitute extreme dishonesty on the part of the Debtors that created a false impression upon which Trustmark relied to advance $230,000.00 on September 18, 2014.

Under the circumstances described above, this Court finds that Trustmark has met its burden in proving the existence of the first element of false pretenses.

2. The Debtors Had Scienter or Intent to Deceive

"When deciding whether a creditor has satisfied the 'intent' prong of a 'false pretenses' dischargeability exception, the bankruptcy court must consider whether the circumstances, as viewed in the aggregate, present a picture of deceptive conduct by the debtor, indicating an intent to deceive his creditor." In re Hurst , 337 B.R. at 133 ; see also In re Dunston , 117 B.R. at 641 . Here, the Debtors' sophistication, business acumen, and long-term experience in this business underscore that they were fully aware of their wrongful intentions and that they knew exactly what they were doing when they led Trustmark to believe that BCGC was the only borrower, that the loan proceeds would be used solely for BCGC's operational purposes, and that the Collateral was and would continue to be owned by BCGC. [Finding of Fact Nos. 1-6]. The evidence reflects that prior to the loan closing on August 18, 2014, the Debtors were told by Dinerstein (FWM's attorney) that they needed to procure a waiver from Trustmark with respect to conveyance of BCGC's assets. [Finding of Fact No. 16(e) ]. Yet, rather than attempting to procure such a waiver, the Debtors chose to go radio silent on Trustmark, struck the provision in the last version of the Asset Purchase Agreement requiring them to obtain a waiver from Trustmark, and plowed ahead with signing the Loan Documents knowing that these documents prohibited conveyance of *659 BCGC's assets without written consent of Trustmark. 42 [Finding of Fact No. 23]. Two days later, Mr. Tegeler executed the Conveyance to transfer all of BCGC's assets to himself without any consideration given in return to BCGC; one day later, Mr. Tegeler executed the Asset Purchase Agreement to transfer these same assets to FWM in exchange for a 50% interest in FWM; approximately four weeks later, Ms. Tegeler provided a blatantly false borrowing base certificate to Trustmark in order to induce Trustmark to advance funds under the Note; Trustmark, in reliance upon this materially inaccurate borrowing base certificate and unaware that the Collateral had been transferred to FWM, wire transferred $230,000.00 to BCGC's account at Frost Bank; and Ms. Tegeler thereafter transferred these funds out of BCGC's account over to FWM's account (with BCGC once again receiving no consideration), with the Debtors' knowledge that these funds would be used to pay obligations of FWM. Viewed in the aggregate, this Court finds that these circumstances present a picture of deceptive conduct by the Debtors, indicating a clear intent to deceive Trustmark. See, e.g. , In re Hurst , 337 B.R. at 133-34 (stating, when holding the debt made by the debtor nondischargeable for false pretenses, that "[i]ntent to deceive is present if a debtor intends or has reason to expect a creditor to act, or to refrain from action, in reliance upon the debtor's misrepresentation; a result is intended if a debtor either acts with desire to cause it or acts believing that there is a substantial certainty that the result will follow from his conduct.").

Mr. Tegeler heavily relies on the affirmative defense that his dyslexia somehow undermined his ability to understand his actions at the time of his execution of the Conveyance and the Asset Purchase Agreement, which, collectively, resulted in FWM taking title to all of BCGC's assets. But, the Court finds that Mr. Tegeler conveniently relies on his dyslexia to his benefit. In one instance, Mr. Tegeler acknowledged that he, along with his wife and Stephens, met with Petrilla on August 18, 2014, at the loan closing. [Finding of Fact No. 17]. At this meeting, the Debtors reviewed and signed all of Trustmark's Loan Documents, confirming that they read and understood their contents. [ Id. ]. Mr. Tegeler neve

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