Appeals court shields Greenpoint fund from legal-fee claim

On Feb. 27, 2026, an appeals court said Greenpoint Tactical Income Fund don't need to pay Michael Hull’s unpaid legal fees to Ballard Spahr. 

Greenpoint Tactical Income Fund LLC, a Wisconsin-based investment fund focused on gems and fine minerals, had already drawn the attention of regulators and investors before it entered chapter 11 in October 2019. By 2017, the Department of Justice and the Securities and Exchange Commission were investigating possible securities law violations relating to the solicitation of investments in GTIF. At the same time, investors were preparing arbitration claims over alleged securities violations. 

Michael Hull controlled Greenpoint Asset Management II LLC, known as GAM, one of GTIF’s two managing members, and also controlled an unrelated investment firm, Bluepoint Investment Counsel LLC. The other managing member of GTIF was Chrysalis Financial LLC, controlled by Christopher Nohl. 

In August 2017, as the federal investigations were pending, Hull hired the law firm Ballard Spahr LLP to represent him and Bluepoint in connection with those investigations. He retained Ballard again in January 2018, as GTIF investors prepared to commence arbitration proceedings against the fund and its leadership. Both engagements were put in writing. Those letters reflected that Hull and Bluepoint were the clients and did not refer to any payment obligation belonging to GTIF. In the second letter, Ballard asked Hull to provide a $15,000 retainer and pay $5,775.75 for the outstanding balance from the first engagement. 

During the investor arbitration, some of Ballard’s work benefited all respondents, including GTIF, not just Hull and Bluepoint. Ballard sent its invoices to Hull at a non-GTIF address, but the record shows two GTIF checks payable to Ballard totaling $57,500, with “Axelrod” in the memo line. Even after those payments, Ballard said it was still owed $236,717. 

When GTIF filed for bankruptcy protection on Oct. 4, 2019, Ballard filed a claim in the case for the unpaid fees. The Official Committee of Equity Security Holders, appointed to represent GTIF’s equity holders, objected. Its argument was that GTIF had no liability for Hull’s debt to Ballard because Hull and Bluepoint, not GTIF, had engaged the firm. 

Initially, GTIF did not list Ballard as a creditor. Two weeks after the Equity Committee objected, GTIF, through Hull, filed an amended list of unsecured creditors listing, for the first time, a debt to Ballard in the amount of $230,000. That change did not resolve the dispute, and the Equity Committee moved for summary judgment. 

Ballard responded with three theories. First, it argued that GTIF, through its managing members, had orally agreed to pay Ballard’s fees. Second, if that promise fell within Wisconsin’s statute requiring certain guarantees to be in writing, Ballard said the promise should still be enforced under promissory estoppel because Ballard relied on it. Third, Ballard argued that Hull had a right to be indemnified by GTIF under Wisconsin’s LLC statute and GTIF’s operating agreement, and that this indemnification right supported Ballard’s claim. 

The bankruptcy court rejected all three arguments and granted summary judgment to the Equity Committee. The district court affirmed. On Feb. 27, 2026, the U.S. Court of Appeals for the Seventh Circuit, in an opinion by Judge St. Eve, again affirmed. 

On the alleged oral promise, the court said Ballard had not produced enough specific evidence to avoid summary judgment. Ballard relied mainly on a declaration from its lead partner, David Axelrod, stating that GTIF, through its managing members, orally agreed to pay Ballard’s fees and that Ballard would not have taken on the work without assurance of payment by GTIF. The court treated that statement as too conclusory because it did not explain who made the promise, what exactly was said, or when it was made. Without those details and supporting documents, there was not enough to create a genuine factual dispute. GTIF’s payments of some invoices and the later scheduling of a debt to Ballard did not answer the specific legal question of whether GTIF had made a primary promise to assume Hull’s debt. 

For the promissory-estoppel claim, the court applied Wisconsin law requiring a promise definite enough that a reasonable person would expect it to induce reliance. Once the conclusory parts of Axelrod’s declaration were set aside, the record contained no evidence of the content of the alleged promise itself. Without that, the court said, Ballard could not satisfy the first element of promissory estoppel. 

On indemnification, the court focused on the statutory language and the operating agreement. Wisconsin’s LLC statute requires an LLC to indemnify a person for certain liabilities incurred “by reason of” the person’s capacity as a member or manager. It was undisputed that GAM and Chrysalis were GTIF’s members and managing members, and that Hull himself was not. The court did not extend the statute beyond its text to cover Hull personally, even though he controlled GAM. 

GTIF’s operating agreement worked the same way. It defined “Member” and “Managing Member” to include only GAM and Chrysalis and provided indemnification and advancement of expenses to those defined parties. Because Hull did not fall within those definitions, the court concluded that he had no indemnification right under the operating agreement. 

The opinion ends by describing a related SEC enforcement case. In that separate case, the SEC sued Hull, Nohl and their associated entities, including GTIF, GAM, Chrysalis and Bluepoint, over valuations and disclosures. A jury found them liable on nine counts for violations of the securities laws. With the exception of GTIF, which after chapter 11 was in new hands, the court held the defendants jointly and severally liable for $12.5 million in disgorgement and $3.5 million in prejudgment interest. The court also ordered Hull and Nohl to pay $5 million each in civil penalties. 

The takeaway is straightforward. When investigations and investor actions arrive, insiders cannot assume the fund will automatically cover their legal bills. Engagement letters that name individuals or related firms as the clients, and operating agreements that carefully define who is indemnified, will be read as written. In this case, that meant the fund was not responsible for the fees Ballard sought to recover.