Expert Analysis

• Character.AI Ch. 11 Tests New Model For Preserving AI Value

  

  Character.AI's bankruptcy is charting a path for preserving value in an artificial intelligence business that depends on retaining unfinished technology and the employees who know how to develop it, while accounting for the firm's failure and its consequences for creditors, says Diane Dick at University of Iowa College of Law.

• Opinion

  Judges Must Turn To Merits Earlier To Fix Civil Justice System

  

  The U.S. justice system is long overdue for a cultural shift that encourages judges to engage with the merits of a case from the outset, which would help to cut through procedural complexities and deliver high-quality justice efficiently and at lower cost, says Steven Kayman at Rottenberg Lipman.

• Series

  Open-Water Swimming Makes Me A Better Lawyer

  

  Swimming long distances in open waters is not necessarily an escape from my intellectual property practice, but a complementary discipline that similarly rewards sustained attention, intellectual curiosity, resilience and the ability to pursue a distant objective without losing command of the immediate task, says Christina MacDougall at Morgan Lewis.

• 3 Factors That Can Make Or Break A Subchapter V Case

  

  The Bankruptcy Threshold Adjustment Act may soon increase the debt limit for Subchapter V bankruptcy, making the process available to more business, but their success within it depends on the debtors' efficiency, credibility and accurate financial assessments, say Michael Martinez at Grier Wright and Mary Grasta at Stretto.

• Opinion

  The Invisible AI Danger That May Undermine Legal Profession

  

  A public database tracking cases involving hallucinations generated by artificial intelligence recently surpassed 2,200 entries, but the bigger risk underlying attorneys’ use of such tools is that they will slowly surrender their judgment to AI and lose analytical skills, says Massachusetts District Court Associate Justice Brian Palmucci.

• How AI Could Help Judges Spot Their Own Biases

  

  In close cases where there’s room for discretion, artificial intelligence could challenge judges’ implicit biases by running counterfactual tests at scale — but any judicial use of such tools would need guardrails, say Arnold Peter at Peter Law and Nancy Rapoport at University of Nevada.

• How Spirit's 1st Bankruptcy Sowed The Seeds Of Its Collapse

  

  Though Spirit Airlines' first Chapter 11 plan was broadly supported and moved swiftly through confirmation, it avoided using many of the Bankruptcy Code's most powerful operational tools in favor of a "business as usual" approach, which may have led to the airline's second bankruptcy and ultimate wind-down, say attorneys at Cleary.

• 3 Strategies To Reduce AI Sycophancy In Legal Work

  

  The tendency of generative artificial intelligence models to tell users what they want to hear can reinforce attorneys’ confirmation bias when testing the strength of arguments, and it can’t simply be prompted away — but a few practices can help mitigate it, says Michael Ott at Ice Miller.

• 2nd Circ. EFAA Ruling Shifts Employer Litigation Strategy

  

  In Diaz-Roa v. Hermes Law, the Second Circuit recently held that, under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, employers can't carve out nonharassment claims and send them to arbitration, which has implications for discovery, litigation costs and resolution strategy in EFAA-covered disputes, say attorneys at Krevolin Horst.

• Balancing Independence And Costs In Ch. 11 Investigations

  

  A dispute in the Hughes Satellite Systems Chapter 11 case, pending in Texas bankruptcy court, raises a recurring issue in corporate restructurings: preserving the value of an independent corporate investigation and the investigative authority the Bankruptcy Code gives other constituencies, without making the estate pay twice for the same work, says attorney Kenneth Rosen.

• Series

  Being In The Peace Corps Made Me A Better Lawyer

  

  When I served in the Peace Corps, the people of the West African village where I was stationed helped me acclimate to my new surroundings and enabled me to develop problem-solving, teamwork and empathy skills that have bolstered my legal practice far beyond the ability to offer technical advice, says Brian Bewley at McGuireWoods.

• Industry On The Rocks: 5 Options For Distressed Alcohol Cos.

  

  As the U.S. alcohol industry, long regarded as recession-resistant and reliably profitable, confronts an unprecedented convergence of headwinds, producers, distributors and retailers must assess their financial position and explore the range of available options, including out-of-court restructuring, bankruptcy protection and strategic transactions, say attorneys at Adams & Reese.

• Bankruptcy Deadlines, Concessions Can Decide Lien Priority

  

  The Fifth Circuit's recent decision in Adler v. Energy Debt Holdings warns buyers of secured claims to watch for binding concessions in earlier proceedings and court-imposed lien challenge deadlines, says Jennifer Maleski at Dilworth Paxson.

• What Lawyers Should Know Before Accepting Crypto Payment

  

  As clients increasingly request to pay legal fees, retainers and escrow funds using cryptocurrency, lawyers should consider how only a handful of state bar authorities have addressed the issue with varying ethics opinions, as well as the related questions that no authority has yet answered, says attorney Felix Shipkevich.

• Data Sale In Spirit Bankruptcy Raises Novel Privacy Risks

  

  Spirit Airlines' planned sale of deidentified business data to Google for artificial intelligence training exposes gaps in the Bankruptcy Code's privacy guardrails, particularly for employee information, say attorneys at Patterson Belknap.