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Incident Tracker / United States (federal)

In re Prince Global Holdings Ltd., No. 26-10769 (MG) (Bankr. S.D.N.Y.), Sullivan & Cromwell AI-citation disclosure

·US Bankruptcy Court, Southern District of New York (Chief Judge Martin Glenn)·US-FEDOther

In the US Bankruptcy Court for the Southern District of New York, Sullivan & Cromwell disclosed on 18 April 2026 that its emergency Chapter 15 motion in In re Prince Global Holdings contained AI-hallucinated citations, withdrew it and filed a corrected motion. Provisional relief followed on 23 April; no sanctions entry appears on the public docket through 10 August 2026.

Analysis
Sullivan & Cromwell's AI hallucinations: what the firm told the bankruptcy court, and what happened next
Court
US Bankruptcy Court, Southern District of New York (Chief Judge Martin Glenn)
Date
2026-04-18
Who used the AI
Firm
AI tool
Not identified in the record
Conduct
Sullivan & Cromwell, counsel to the joint provisional liquidators, wrote to Chief Judge Glenn on 18 April 2026 disclosing that its 9 April 2026 emergency motion for ex parte and provisional relief (ECF 9) contained inaccurate citations and other errors, including AI hallucinations that fabricated citations, misquoted authorities and cited non-existent sources. The firm said its AI policies had not been followed and its citation review had not caught the errors. It withdrew the motion and filed a corrected motion with a redline the same day. Opposing counsel at Boies Schiller Flexner had identified the errors; Kobre & Kim's 21 April letter counted no fewer than 28 erroneous citations.
Outcome
Other
Penalty
No monetary penalty recorded
Regulatory outcome
No separate regulatory disposition recorded
Status
Verified against listed sources
Last checked
2026-09-04

What was fabricated or misused

  • No fewer than 28 erroneous citations in the emergency motion — including fabricated quotations from an opinion from the Bankruptcy Court; the correction schedule did not label every error by type
  • In re Soundview Elite Ltd., 503 B.R. 571 — corrected to In re Soundview Elite Ltd., 543 B.R. 78
  • In re Three Arrows Cap., Ltd., 2022 WL 17985951 — corrected to 2022 WL 17985969 with a rewritten parenthetical

What the court said

“The inaccuracies and errors in the Motion include artificial intelligence (“AI”) “hallucinations.””
Sullivan & Cromwell letter, p. 1
“The Firm’s policies on the use of AI were not followed in connection with the preparation of the Motion.”
Sullivan & Cromwell letter, p. 1
“The Firm and I are keenly aware of our responsibility to ensure the accuracy of all submissions including under Local Bankruptcy Rule 9011-1(d), and I take responsibility for the failure to do so.”
Sullivan & Cromwell letter, p. 2
“Indeed, the S&C Letter identified no less than 28 erroneous citations in the Motion—including, but not limited to, fabricated quotations from an opinion from this Court—and numerous inaccuracies in other filings.”
Kobre & Kim letter, p. 2

Timeline

  1. Emergency motion for ex parte and provisional Chapter 15 relief filed with inaccurate citations and other errors.
  2. Sullivan & Cromwell disclosed AI hallucinations, withdrew the motion and filed a corrected motion with a redline.
  3. Kobre & Kim asked to adjourn the hearing, citing no less than 28 erroneous citations.
  4. Chief Judge Glenn granted provisional relief without addressing the citation errors.

Why this case matters

Sullivan & Cromwell Prince Global is a firm-self-disclosure record, not a sanctions ruling. It shows a large firm with written AI controls, mandatory training and a manual-citation policy still putting a defective emergency motion on a public docket. Unlike Lacey v State Farm, the firm withdrew the motion, filed a corrected version and gave the court a redline within days; unlike Deutsche Bank v LeTennier, the public docket shows no later sanction order through the record's check date. That contrast makes the page useful for governance: controls matter only if the filing workflow proves they were followed.

Practice note

A firm policy is not enough. Before filing an AI-assisted motion, the responsible lawyer should require a source-by-source cite check against the reporter, Westlaw/Lexis entry or official docket, and keep a redline of any correction. If hallucinations are found after filing, withdraw or correct immediately, tell the court what happened and identify any other papers reviewed.

Primary sources for this incident

Related regulation records for this incident

No related regulation record has been linked to this incident yet.

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Cite this record

SafeLegalAI Global Legal AI Incident Tracker, “In re Prince Global Holdings Ltd., No. 26-10769 (MG) (Bankr. S.D.N.Y.), Sullivan & Cromwell AI-citation disclosure”, safelegalai.com/tracker/sullivan-cromwell-prince-global (accessed 2026-09-16). Data: CC BY 4.0.

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