Sullivan & Cromwell Apologizes to Federal Judge for AI-Generated Errors in Bankruptcy Filing

One of America's biggest law firms, Sullivan & Cromwell, has reportedly apologised to a Federal judge for AI-driven errors in a bankruptcy case. According to a report in Financial Times, Sullivan & Cromwell (S&C) wrote a letter to a bankruptcy judge to apologize for a court motion that included inaccurate citations generated by artificial intelligence. The filing was made in the US Bankruptcy Court for the Southern District of New York. In the letter sent on April 18, Andrew Dietderich, founder and co-head of Sullivan's restructuring group, said that the company had been made aware of errors in an emergency motion filed in the bankruptcy of Prince Global Holdings. "The inaccuracies and errors in the Motion include artificial intelligence ("AI") "hallucinations," according to the letter, which added that the firm had not followed its protocols in preparing the document. "We sincerely regret the errors in the Motion and the burden they have imposed on the Court and the parties, and I apologize on behalf of our entire team," Dietderich wrote in the letter. S&C reportedly told the court that the firm maintained "rigorous" standards when using AI tools and that it "instructs lawyers to 'trust nothing and verify everything'". Failure to verify AI-generated output "constitutes a violation of firm policy", it said. Some key AI errors that Sullivan & Cromwell apologised to the judge for: • Fictitious Case Names: The filing reportedly included names of legal cases that do not exist • Fabricated Quotes: The document is said to contain direct quotes that were never actually spoken or written • Error in Summary filed: Draft filing erroneously summarised the conclusions made in other cases • Non-existent Statutes: The AI incorrectly analyzed or entirely invented provisions within the U.S. Bankruptcy Code Sullivan & Cromwell has ChatGPT licence Though it is not clear which AI tool was used to make the faulty motion, S&C reportedly has an enterprise licence for OpenAI's ChatGPT. The company's partners typically charge more than $2,000 per hour in bankruptcy cases like these. What is the Bankruptcy case that the company 'messed' up The law firm represents liquidators overseeing actions against Prince Group, a Cambodia-based conglomerate. The case revolves around S&C's representation of liquidators appointed by legal authorities in the British Virgin Islands who are pursuing actions against Prince Group and its owner Chen Zhi. In 2025, the US federal prosecutors charged Zhi with wire fraud and money laundering, accusing him of "directing Prince Group's operation of forced-labour scam compounds across Cambodia . . . that stole billions of dollars from victims in the United States and around the world".