Sullivan & Cromwell has been forced into a very public mea culpa in Manhattan federal court, after an emergency filing in the Prince Global Holdings Chapter 15 case turned out to be riddled with bogus citations and other misfires generated by artificial intelligence. The white-shoe firm told the court the errors were AI "hallucinations" and has since filed a corrected version of the motion.
In an April 18 letter to Chief Bankruptcy Judge Martin Glenn, Andrew Dietderich, co-head of the firm’s global restructuring group, admitted that the motion included fabricated authorities, misquoted passages and other inaccuracies, according to the Maryland Daily Record. Dietderich said the firm’s own AI policies were ignored and that a second-level review still failed to catch the problems. He told the judge he had personally called opposing counsel to apologize and that corrected papers had been submitted to the court.
What the firm told the court
Dietderich detailed how the flawed filing ranged from bad pin cites to citations of non-existent legal authorities, and acknowledged that opposing counsel at Boies Schiller Flexner were the ones who flagged the mess. The Southern District docket now reflects amended entries and a corrected filing in the Chapter 15 case after the mistake surfaced, according to the public case record, which is accessible through Inforuptcy.
Legal blog Above the Law published the firm’s letter, highlighted that the attachments listed dozens of corrected citations, and ran excerpts showing just how much cleanup was required after the AI-driven missteps.
Why it matters for lawyers and courts
The dust-up is only the latest high-profile reminder that generative AI can confidently spew out convincing but invented "authority," and that lawyers, not the software, are the ones who sign their names to it. The Thomson Reuters Institute has cataloged a series of similar episodes and stresses that existing ethics rules, including Rule 11 and Model Rule 1.1, already require attorneys to independently verify their research and maintain real human review before filing anything with a court, according to Thomson Reuters.
Case background
Sullivan & Cromwell represents foreign court-appointed liquidators handling the wind-down of Prince Global Holdings Limited, a British Virgin Islands company linked to allegations that its founder, Chen Zhi, ran forced-labor scam compounds and a large investment fraud operation. Federal prosecutors in Brooklyn unsealed an indictment last year charging Chen with wire-fraud and money-laundering conspiracies and filed a historic forfeiture complaint, according to a press release from the Department of Justice.
The Chapter 15 docket shows filings by Dietderich on behalf of the liquidators and reflects the corrected entries that were added after his apology letter was delivered to the court, according to Inforuptcy.
