Leon Greenblatt and two business associates controlled Loop Corp. Greenblatt also controlled Banco Panamericano. In 2000, Banco gave Loop a $9.9 million line of credit in exchange for a lien on Loop’s assets. Also in 2000, Loop opened a trading account at Wachovia. Unfortunately, Loop's margin-trading activities in the Wachovia account were not very successful. By May 2001, the account was liquidated and Loop still owed Wachovia almost $2 million. Loop also defaulted on the Banco line of credit in 2001. Nevertheless, Banco extended and expanded the line of credit. Loop used the funds for many things, including investments in other companies, but never repaid Wachovia. Wachovia initiated arbitration against Loop and the individual businessman. When the individuals brought suit to enjoin the arbitration against them, Wachovia dropped them from the arbitration and filed counterclaims. Wachovia eventually obtained a judgment from the arbitration for almost $2.5 million. After a bench trial, Judge Kendall (N.D. Ill.) pierced Loop's corporate veil and held the individual defendants personally liable. The court also voided several of Loop's transfers. The individuals appeal.

In their opinion, Seventh Circuit Judges Manion, Tinder, and Hamilton affirmed for the most part and vacated in part. The Court first addressed the veil piercing issue. The Court noted that Illinois permits veil piercing only when the "separate personalities" of the individuals and the corporation no longer exist and where continuing to recognize the corporate existence would result in fraud or promote injustice. With respect to the first prong, the Court rattled off a laundry list of findings that showed that the defendants abused the corporate form, including inadequate capitalization, comingling funds, diverting assets, etc. With respect to the second prong, the Court noted that it requires something less than fraud. Here, continuing to recognize the corporate structure would allow the shareholders to stick Wachovia with the loss from their failed investment after they created the appearance of a company that was able to cover its losses. That is enough to satisfy the second prong. The Court turned to the individual fraudulent transfers. It noted that Wachovia had to prove intent to defraud by clear and convincing evidence. The Court concluded that the district court had sufficient evidence to infer fraudulent intent. It did conclude, however, the district court erred when it found one payment fraudulent that had not been charged in the complaint. Finally, with respect to attorney's fees, the Court found that the underlying contract provided for a fee award and the individuals did not overcome Wachovia’s showing of reasonableness.