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Feb. 27, 2026 Get Citation Alerts Download PDF Add Note

Ballard Spahr LLP v. Official Committee of Equity Security Holders

Court of Appeals for the Seventh Circuit

• Citations: None known
• Docket Number: 25-2134

• Judges: St.Eve

• Opinion

• Authorities (28)

• Cited By (0)

• Summaries (0)

• Similar Cases (13.4K)

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Combined Opinion

                        by St.Eve

In the

United States Court of Appeals
For the Seventh Circuit

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No. 25-2134
IN RE: GREENPOINT TACTICAL INCOME FUND LLC,
Debtor.

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BALLARD SPAHR LLP,
Appellant,

v.

OFFICIAL COMMITTEE OF EQUITY SECURITY HOLDERS,
Appellee.

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Appeal from the United States District Court for the
Eastern District of Wisconsin.
No. 2:21-cv-00175 — Pamela Pepper, Chief Judge.

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ARGUED JANUARY 27, 2026 — DECIDED FEBRUARY 27, 2026

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Before ST. EVE, KIRSCH, and JACKSON-AKIWUMI, Circuit
Judges.
ST. EVE, Circuit Judge. Greenpoint Tactical Income Fund
(“GTIF”), an investment fund focused on gems and fine min-
erals, filed for bankruptcy in October 2019. In the ensuing
2 No. 25-2134

proceedings, the law firm Ballard Spahr LLP filed a claim for
$236,717 in unpaid legal fees. Michael Hull, who controlled
one of the two limited liability companies (“LLC”) that served
as GTIF’s managing members, incurred those Ballard fees.
Ballard, however, insisted GTIF was on the hook for Hull’s
outstanding balance. The bankruptcy and district courts be-
low thought otherwise, granting and affirming summary
judgment to the Official Committee of Equity Security Hold-
ers (“Equity Committee”), which objected to Ballard’s claim.
We affirm.
I. Background
GTIF, a Wisconsin-based LLC, had two managing mem-
bers: Greenpoint Asset Management II LLC (“GAM”) and
Chrysalis Financial LLC. Hull controlled the former, as well
as an unrelated investment firm called Bluepoint Investment
Counsel LLC. Christopher Nohl controlled the latter.
In 2017, GTIF, GAM, Chrysalis, Hull, Nohl, and Bluepoint
found themselves the subjects of Department of Justice and
Securities and Exchange Commission investigations into pos-
sible securities law violations relating to the solicitation of in-
vestments in GTIF. So in August of that year, Hull engaged
Ballard to represent him and Bluepoint in connection with
those investigations. Hull engaged Ballard again the follow-
ing January, as GTIF investors prepared to commence arbitra-
tion proceedings against the fund and its leadership for al-
leged violations similar to those underlying the federal inves-
tigations. Hull and Ballard memorialized both of these en-
gagements in signed writings, neither of which referred to
any payment obligation belonging to GTIF. Rather, in the sec-
ond engagement letter, Ballard requested that Hull remit
No. 25-2134 3

$15,000 for a retainer and $5,775.75 for the outstanding bal-
ance on the first engagement.
During the ensuing arbitration proceedings, some of Bal-
lard’s efforts—working with an expert, leading depositions,
managing document discovery, and assisting with brief draft-
ing—accrued to the benefit of all respondents (including
GTIF), not just its clients, Hull and Bluepoint. As for payment,
Ballard issued its invoices to Hull at one of his non-GTIF ad-
dresses, but the record contains two GTIF checks payable to
Ballard totaling $57,500, both listing “Axelrod”—the partner
leading Hull’s engagement—in the “Memo” line. Ballard still
had an outstanding debt owed in the amount of $236,717.
On October 4, 2019, GTIF filed a voluntary petition for re-
lief under chapter 11 of the Bankruptcy Code. The following
February, Ballard filed a claim against GTIF for the unpaid
legal fees. The Equity Committee, which the United States
Trustee had appointed under 11 U.S.C. § 1102 (a)(2) to repre-
sent those holding equity in GTIF, objected to Ballard’s claim,
contending GTIF had no liability for Hull’s debt to Ballard.
Two weeks later, GTIF—through Hull—filed an amended list
of unsecured creditors listing, for the first time, a debt to Bal-
lard in the slightly reduced amount of $230,000.
In December 2020, the Equity Committee moved for sum-
mary judgment on its objection to Ballard’s claim. In response,
Ballard identified three grounds on which it was entitled to
enforce Hull’s debt against GTIF: an alleged oral promise
made by GTIF’s managing members to assume Hull’s debt,
enforceable notwithstanding the Wisconsin statute of frauds;
promissory estoppel, in the event the statute of frauds applies;
and indemnification rights under Wisconsin law and GTIF’s
operating agreement. Rejecting each of them, the bankruptcy
4 No. 25-2134

court granted summary judgment to the Equity Committee.
Ballard appealed to the district court, which affirmed.

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A brief postscript: The SEC’s case against GTIF, GAM,
Chrysalis, Hull, Nohl, and Bluepoint proceeded to trial. As
the district court summarized it, the SEC’s case charged Hull,
Nohl, and their associated entities with “violating various
federal securities laws and regulations by knowingly or reck-
lessly inflating the value of their funds’ investments in gems,
minerals, and an environmental remediation company, then
paying themselves handsome management fees based on
these inflated valuations, as well as misleading investors fur-
ther by reporting nonexistent income.” SEC v. Bluepoint Inv.
Couns., LLC, No. 19-cv-809, 2025 WL 2582005, at *1 (W.D. Wis.
Sep. 5, 2025). The jury found them liable on nine counts aris-
ing out of these violations of the securities laws. With the ex-
ception of GTIF, which (post–chapter 11) is in new hands, the
court held the defendants jointly and severally liable for $12.5
million in disgorgement and $3.5 million in prejudgment in-
terest. See id. at *7. The court ordered Hull and Nohl to pay $5
million each in civil penalties. Id.
II. Discussion
We review the district court’s decision to affirm the bank-
ruptcy court’s grant of summary judgment de novo. Dick ex
rel. Amended Hilbert Residence Maint. Tr. v. Conseco, Inc., 458
F.3d 573, 577 (7th Cir. 2006). Because Federal Rule of Bank-
ruptcy Procedure 7056, which governs summary judgment,
incorporates by reference Federal Rule of Civil Procedure 56,
the familiar summary judgment standards generally applica-
ble to civil actions control here.
No. 25-2134 5

Under those standards, the Equity Committee is entitled
to summary judgment if no “reasonable jury could return a
verdict for” Ballard. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986). Ballard must “‘designate specific facts show-
ing that there is a genuine’ dispute such that the court should
allow [its] claim to proceed.” Osborn v. JAB Mgmt. Servs., Inc.,
126 F.4th 1250, 1258 (7th Cir. 2025) (quoting Celotex Corp. v.
Catrett, 477 U.S. 317, 324 (1986)). While it can satisfy that obli-
gation with an affidavit or declaration, 1 it “cannot rest ‘upon
conclusory statements in affidavits’”; Ballard instead “must
go beyond the pleadings and support [its] contentions with
proper documentary evidence.” Foster v. PNC Bank, Nat’l
Ass’n, 52 F.4th 315, 320 (7th Cir. 2022) (quoting Weaver v.
Champion Petfoods USA Inc., 3 F.4th 927, 934 (7th Cir. 2021)).
And while “we construe the record facts in the light most fa-
vorable to the nonmoving party, ‘our favor ... does not extend
to drawing inferences that are supported by only speculation
or conjecture.’” Osborn, 126 F.4th at 1258 (quoting Argyropou-
los v. City of Alton, 539 F.3d 724, 732 (7th Cir. 2008)).
Ballard asserts three bases to find its claim enforceable
against GTIF: an oral promise outside the scope of the statute
of frauds, promissory estoppel, and statutory and contractual
indemnification rights. The parties agree that Wisconsin law
governs the viability of Ballard’s claim. See Raleigh v. Ill. Dep’t
of Revenue, 530 U.S. 15, 20 (2000) (“Creditors’ entitlements in
bankruptcy arise in the first instance from the underlying sub-
stantive law creating the debtor’s obligation, subject to any

1 A declaration under 28 U.S.C. § 1746 “is equivalent to an affidavit for

purposes of summary judgment.” Craig v. Wrought Washer Mfg., Inc., 108
F.4th 537, 543 n.14 (7th Cir. 2024).
6 No. 25-2134

qualifying or contrary provisions of the Bankruptcy Code.
The ‘basic federal rule’ in bankruptcy is that state law governs
the substance of claims ….” (quoting Butner v. United States,
440 U.S. 48, 57 (1979))). As explained below, Ballard cannot
prevail on any of these three bases.
A. Oral Promise and the Statute of Frauds
Ballard contends GTIF orally agreed to pay its fees from
its engagements with Hull. The law firm concedes it did not
reduce the agreement—which it says was crucial to its perfor-
mance of the engagements—to writing. The Equity Commit-
tee responds by invoking Wisconsin’s statute of frauds, under
which a “special promise to answer for the debt, default or
miscarriage of another person” is unenforceable absent a
signed writing. Wis. Stat. § 241.02 (1)(b).
Resolving this dispute turns on the subtle but critical dis-
tinction between two types of promises. On one hand, “a ‘col-
lateral’ promise to pay another’s debt upon the other’s breach
of his or her primary promise” falls within the scope of the
statute of frauds. Brennan, Steil, Basting & MacDougall, S.C. v.
Colby, 525 N.W.2d 273, 275 (Wis. Ct. App. 1994). On the other
hand, “the promisor’s own ‘primary’ promise to assume the
debt himself or herself” falls beyond it. Id.; see Prize Steak
Prods., Inc. v. Bally’s Tom Foolery, Inc., 717 F.2d 367, 369 (7th
Cir. 1983). Ballard therefore must show that GTIF orally
promised to assume Hull’s debt regardless of whether he de-
faulted; it would not be enough to show that GTIF promised
only to backstop Hull’s obligation. In determining whether a
promise is primary or collateral, which is a question of fact,
relevant considerations include “[t]he form of the promise,
the nature of the consideration, the language of the promise
used in light of the circumstances, [and] the motive and object
No. 25-2134 7

of making the promise.” Mann v. Erie Mfg. Co., 120 N.W.2d
711, 715 (Wis. 1963). Ultimately, however, the determination
turns on “all the evidence.” Id.
To prove the existence and nature of GTIF’s oral agree-
ment, Ballard almost exclusively relies on a declaration that
David Axelrod, its lead partner for the Hull engagements,
submitted during discovery. The declaration stated in rele-
vant part:
In connection with Ballard Spahr’s engagement,
GTIF, through its managing members, orally
agreed with Ballard Spahr to pay the fees and
expenses of Ballard Spahr in connection with
the Proceedings (the “Fee Agreement”). The
agreement was not conditional. Ballard Spahr
would not have undertaken the engagement it
did without assurance of payment by GTIF.
Beyond the declaration, Ballard relies on the facts that GTIF
paid ten of its invoices and that GTIF (through Hull) sched-
uled a $230,000 debt to Ballard during the bankruptcy pro-
ceedings.
Starting with the declaration, we agree with the courts be-
low that its “conclusory assertion falls far short of creating a
triable issue of fact” on whether GTIF made the alleged pri-
mary promise. King v. Ford Motor Co., 872 F.3d 833, 840 (7th
Cir. 2017). Axelrod merely asserts that GTIF made the prom-
ise in question, but he cites no supporting documentation, nor
does he specify any pertinent details, such as who said what
and when. Such a declaration does not suffice to defeat a mo-
tion for summary judgment. See, e.g., Foster, 52 F.4th at 321;
King, 872 F.3d at 840; Bordelon v. Bd. of Educ. of the City of Chi.,
8 No. 25-2134

811 F.3d 984, 989, 991 (7th Cir. 2016) (“[C]onclusory state-
ments, not grounded in specific facts, are not sufficient to
avoid summary judgment.” (quoting Lucas v. Chi. Transit
Auth., 367 F.3d 714, 726 (7th Cir. 2004))). Critically, without the
Axelrod declaration, Ballard lacks any evidence of “important
considerations” like “the form of the promise” and “the lan-
guage of the promise.” Marshall v. Bellin, 133 N.W.2d 751, 752
(Wis. 1965).
Ballard protests that rejecting this portion of the Axelrod
declaration as conclusory improperly weighs the evidence
and makes a credibility determination. But courts are within
their rights to “observe[] that [an] affidavit did not contain
any facts—as opposed to conclusions,” King, 872 F.3d at 840,
and to therefore “find affidavits and other forms of evidence
as insufficient or conclusory as a legal matter at the summary
judgment stage,” Foster, 52 F.4th at 320.
Ballard also identifies two pieces of evidence that it claims
create a triable issue of fact: GTIF’s payment of some invoices
and its scheduling of the $230,000 debt. Neither of those facts,
however, speak to the relevant question under the statute of
frauds, which is not whether GTIF had any obligation to Bal-
lard but whether it had a primary one. See Prize Steak Prods.,
717 F.2d at 369. Of course, Ballard is entitled to the benefit of
reasonable inferences, but we will not “draw[] inferences that
are supported by only speculation or conjecture.” Osborn, 126
F.4th at 1258 (quoting Argyropoulos, 539 F.3d at 732); see Foster,
52 F.4th at 320 (“Mere speculation cannot ‘be used to manu-
facture a genuine issue of fact.’” (quoting Weaver, 3 F.4th at
934)). No reasonable inference could lead a factfinder to find
in Ballard’s favor where it has no evidence of the promise it-
self and the evidence it does have is not tethered to the
No. 25-2134 9

dispositive question under Wisconsin law. The statute of
frauds thus bars Ballard’s attempt to enforce GTIF’s oral
promise on a contract theory.
B. Promissory Estoppel
As there is no genuine issue of material fact on the statute
of frauds, we turn to Ballard’s alternative argument that
GTIF’s oral promise is enforceable under promissory estop-
pel. 2 In Wisconsin, that cause of action has three elements:
(1) the promise was “one which the promisor should reason-
ably expect to induce action or forbearance of a definite and
substantial character on the part of the promisee”; (2) the
promise “induce[d] such action or forbearance”; and (3) injus-
tice can “be avoided only by enforcement of the promise[.]”
Hoffman v. Red Owl Stores, Inc., 133 N.W.2d 267, 275 (Wis.
1965); see Scott v. Savers Prop. & Cas. Ins. Co., 663 N.W.2d 715,
729 (Wis. 2003). The first two elements present questions of
fact, while the third “involves a policy decision by the court,”
one “necessarily embrac[ing] an element of discretion.” Hoff-
man, 133 N.W.2d at 275. “Promissory estoppel is usually avail-
able only in limited circumstances and does not allow ‘cir-
cumvention of carefully designed rules of contract law.’”
Skyrise Constr. Grp., LLC v. Annex Constr., LLC, 956 F.3d 950,
958 (7th Cir. 2020) (quoting C.G. Schmidt, Inc. v. Permasteelisa
N. Am., 825 F.3d 801, 807 (7th Cir. 2016)) (applying Wisconsin
law).
No reasonable jury could conclude that Ballard satisfied
its burden on the first element, so that is all we address.

2 The parties dispute whether GTIF preserved its promissory estoppel

argument. We assume without deciding that it did.
10 No. 25-2134

Promissory estoppel applies only “when the promise” upon
which the plaintiff rests “is definite enough to induce a rea-
sonable person to rely.” All-Tech Telecom, Inc. v. Amway Corp.,
174 F.3d 862, 868 (7th Cir. 1999) (applying Wisconsin law). For
that reason, in cases governed by Wisconsin law we have time
and again scrutinized the promise on which the plaintiff al-
legedly relied to distinguish “[a] promise that is vague and
hedged about with conditions” from “a firm promise that a
reasonable person would expect to be carried out,” with only
the latter giving rise to a claim for promissory estoppel. Skyr-
ise Constr., 956 F.3d at 959 (quoting Cosgrove v. Bartolotta, 150
F.3d 729, 733 (7th Cir. 1998)); see, e.g., id. at 958–59; Cosgrove,
150 F.3d at 732–33; C.G. Schmidt, 825 F.3d at 809. Here, how-
ever, once we set aside the Axelrod declaration’s conclusory
assertion, the record contains no evidence of the promise it-
self. And without any evidence of the promise, no reasonable
factfinder could conclude that the promise was “one which
the promisor should reasonably expect to induce” reliance.
Hoffman, 133 N.W.2d at 275. Unsurprisingly, Ballard has not
identified any authority, from Wisconsin or otherwise, sup-
porting its view that a plaintiff can carry its burden on the first
element of promissory estoppel without evidence of what the
promisor said or did to induce the promisee’s reliance.
C. Indemnification
Last, we address Ballard’s contention that Hull has a right
of indemnification against GTIF under both a Wisconsin
No. 25-2134 11

statute and GTIF’s operating agreement, which impose sub-
stantially similar requirements. 3
Start with the statute. So long as certain conditions not at
issue here are satisfied, Wisconsin law requires LLCs to “in-
demnify … a person with respect to … any debt, obligation,
or other liability incurred by the person by reason of the per-
son’s former or present capacity as a member or manager.”
Wis. Stat. § 183.0408 (2). 4 In interpreting this provision, we
must “discern[] the meaning of the statute’s enacted lan-
guage.” Serv. Emps. Int’l Union Healthcare Wis. v. Wis. Emp.
Rels. Comm’n, 22 N.W.3d 876, 879 (Wis. 2025). Wisconsin
courts do so by prioritizing intrinsic sources of statutory
meaning—that is, “those based on or derived from the en-
acted law itself”—which “include the statutory text at issue,
related statutes and phrases, a statute’s place within the stat-
utory structure, its stated or textually manifest purpose, and
statutory history.” Id. Extrinsic sources like legislative history
enter the picture only to resolve ambiguity or confirm the
plain meaning derived from intrinsic sources. See id; see also
Wis. ex rel. Kalal v. Cir. Ct. for Dane Cnty., 681 N.W.2d 110, 123–
26 (Wis. 2004).

3 Because both courts below concluded Hull had no right of indemni-

fication, neither reached the question whether Ballard would be entitled
to assert that right to prove its claim. We follow suit.
4 Wisconsin amended its LLC statute in 2022, but the prior indemnifi-

cation requirement was the same in all respects relevant to this appeal. See
1995 Wis. Act 400, repealed and recreated by 2021 Wis. Act 258. We therefore
need not determine which version of the statute governs the conduct at
issue here. We assume for purposes of decision that the version currently
in force does, as Ballard suggests.
12 No. 25-2134

The statute at issue does not cover Hull. Its plain text ex-
tends the indemnification obligation only to members and
managers, but it is undisputed that Hull was neither. Recog-
nizing this obstacle, Ballard counters that we will undercut
the statute’s purpose—protecting corporate decisionmakers
from exposure—if we do not extend its indemnification re-
quirement to Hull. This argument overlooks that the statute
protects an LLC’s decisionmakers as written—and here, those
decisionmakers were GAM and Chrysalis, not Hull and
Nohl. 5 Of course, Hull could have availed himself of the stat-
utory indemnification requirement by opting to manage GTIF
in his personal capacity. He decided instead to control GTIF
through GAM, and that decision has consequences. Cf. Krier
v. Vilione, 766 N.W.2d 517, 525–26 (Wis. 2009) (“[W]here an
individual creates a corporation as a means of carrying out his
business purposes he may not ignore the existence of the cor-
poration in order to avoid its disadvantages.” (quoting Terry
v. Yancey, 344 F.2d 789, 790 (4th Cir. 1965))). At the very least,
we see no “stated or textually manifest purpose” forceful
enough to override the undisputedly clear statutory text.
Ballard’s indemnification argument predicated on the op-
erating agreement falters for similar reasons. Section 6.10(a)
of GTIF’s operating agreement provides in relevant part: “No
Managing Member or Member shall be liable to the Company
for any loss or damage suffered by the Company on account
of any action taken or omitted to be taken by the Managing

5 Ballard responds by stressing that GAM, as an LLC, can act only

through Hull, its agent. That is true, but the inverse is not: Hull need not
act through GAM—he may act through one of his other LLCs, like Blue-
point, or simply as himself. The record shows that is what happened here.
Hull, not GAM, was Ballard’s client for both engagements.
No. 25-2134 13

Member or Member….” Section 6.10(b) then obligates GTIF to
“advance legal expenses and other costs incurred by any such
Indemnified Person as a result of any such action or proceed-
ing under Section 6.10(a).”
“An LLC’s operating agreement is a contract.” Marx v.
Morris, 925 N.W.2d 112, 119 (Wis. 2019). The north star of con-
tract interpretation is “giv[ing] effect to the parties’ inten-
tions.” Tufail v. Midwest Hosp., LLC, 833 N.W.2d 586, 592 (Wis.
2013). Wisconsin courts do so not by evaluating “subjective
intent” but rather by honoring the principle that “unambigu-
ous contract language controls contract interpretation.” Id.
(quoting Kernz v. J.L. French Corp., 667 N.W.2d 751, 755 (Wis.
2003)). Thus, “where the terms of a contract are clear and un-
ambiguous,” Wisconsin courts “construe the contract accord-
ing to its literal terms.” Id.
GTIF’s operating agreement is clear and unambiguous: It
explicitly defines “Member” and “Managing Member” to in-
clude only GAM and Chrysalis. Ballard, as before, seeks to
circumvent the text by arguing that we will frustrate the intent
of the operating agreement if we exclude Hull, who it claims
was functioning as a manager, from the scope of § 6.10(a)
and (b). Putting aside our skepticism that Hull acted as a man-
ager of GTIF in retaining Ballard, in contract interpretation we
“presume the parties’ intent is evidenced by the words they
chose, if those words are unambiguous.” Id. They are—and
Ballard does not contend otherwise—so Hull has no indem-
nification right under the operating agreement.

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The judgment of the district court is
AFFIRMED.