In re Prince Global Holdings Ltd. (2026)

Case details
Full caption
In re Prince Global Holdings Limited, et al.
Country
United States
Jurisdiction
Federal
Decided
2026
Majority
Andrew (Justice)
TELEPHONE: 1-212-558-4000 FACSIMILE: 1-212-558-3588 WWW.SULLCROM.COM 125 Broad Street New York, New York 10004-2498 ______________________ LOS ANGELES • PALO ALTO • WASHINGTON, D.C. BRUSSELS • FRANKFURT • LONDON • PARIS BEIJING • HONG KONG • TOKYO MELBOURNE • SYDNEY April 18, 2026 Via ECF Hon. Martin Glenn, U.S. Bankruptcy Court, S.D.N.Y., One Bowling Green, New York, NY 10004-1408. Re: In re Prince Global Holdings Limited, et al., No. 26-10769 Dear Chief Judge Glenn: Sullivan & Cromwell LLP (the “Firm”) represents the Joint Provisional Liquidators (the “JPLs”) in the above-referenced matter. I became aware Thursday evening that the JPLs’ Emergency Motion for Entry of Orders Granting (I) Ex Parte Relief and (II) Provisional Relief, Pursuant to Section 1519 of the Bankruptcy Code filed with the Court on April 9, 2026 (the “Motion”) [D.I. 9] includes inaccurate citations and other errors, each of which is identified and corrected in Schedule A to this letter. The inaccuracies and errors in the Motion include artificial intelligence (“AI”) “hallucinations.” “Hallucinations” are instances in which artificial intelligence tools fabricate case citations, misquote authorities, or generate non-existent legal sources. We deeply regret that this has occurred. The Firm maintains comprehensive policies and training requirements governing the use of AI tools in legal work. These safeguards are designed to prevent exactly this situation. The Firm’s policies on the use of AI were not followed in connection with the preparation of the Motion. In addition, the Firm has general policies and training requirements for the proper review of legal citations. Regrettably, this review process did not identify the inaccurate citations generated by AI, nor did it identify other errors that appear to have resulted in whole or in part from manual error. The Firm has undertaken immediate remedial measures, including but not limited to a full review of the circumstances leading to these errors, and a re-review of all filings in this matter, and we can confirm that the other filings do not include any AI-related errors. Our re-review did identify non-substantive and/or clerical errors in other filings in this matter (and one citation that confuses Section 1517(d) and Rule 6004(h)), which we 26-10769-mg Doc 25 Filed 04/18/26 Entered 04/18/26 16:10:41 Main Document Pg 1 of 5
Hon. Martin Glenn -2- do not believe to be the result of AI usage. These errors are also identified in Schedule A for the sake of completeness. 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. I want to assure the Court that the Firm’s policies governing AI use are both clear and rigorous. Access to AI tools is conditioned on completion of mandatory training. Before any Firm lawyer is granted access to generative AI tools, the lawyer must complete two required training modules, completion of which is tracked and verified. The training repeatedly emphasizes the risk of AI “hallucinations,” including the fabrication of case citations, misinterpretation of authorities, and inaccurate quotations. It instructs lawyers to “trust nothing and verify everything” and makes clear that failure to independently verify AI-generated output constitutes a violation of Firm policy. The training also reviews the significant consequences of AI-related errors in various cases. These requirements are reinforced in the Firm’s Office Manual for Lawyers, which provides that lawyers “must independently check all answers, case citations, and other information or work product received from an AI Program for both substantive and non-substantive accuracy.” The policy further states that no communication may be sent to a court, regulator, client, or other external party without the exercise of appropriate professional judgment and oversight. Notwithstanding these safeguards, the Firm’s protocols were not followed here. The Firm is also evaluating whether further enhancements to its internal training and review processes are warranted. 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. I also called Boies Schiller Flexner LLP on Friday to thank them for bringing this matter to our attention and to apologize directly to them as well. A corrected version of the Motion, together with a redline reflecting the revisions, is being filed later today. Sincerely, /s/ Andrew G. Dietderich Andrew G. Dietderich 26-10769-mg Doc 25 Filed 04/18/26 Entered 04/18/26 16:10:41 Main Document Pg 2 of 5
Para. Correction 47 . . . In re ENNIA Caribe Holding N.V., 596 B.R. 316, 322 (Bankr. S.D.N.Y. 2019) (internal citations omitted). . . 48 . . . See In re Iovate Health Scis. Int’l Inc., 2025 Bankr. LEXIS 2284, at *34 38 . . . 52, n.2 See Off. of Foreign Assets Control, Frequently Asked Question No. 9 (explaining that blocked property is “frozen”—not seized—and that title remains with the blocked person); Calderon-Cardona v. Bank of N.Y. Mellon, 821 F.3d 161, 169 (2d Cir. 2016) (explaining that blocking rules “prohibit transfers” but do not determine “whether a judgment creditor may obtain those funds through judicial process”); Hausler v. JPMorgan Chase Bank, N.A., 770 F.3d 207, 212 211 (2d Cir. 2014) (noting that blocked assets are not “immunize[d] … from execution”) “subject to execution or attachment in the aid of execution in order to satisfy such judgment . . . for which such terrorist party has been adjudged liable”) (citing Terrorism Risk Insurance Act § 201(a)). 55 . . . In re Three Arrows Capital, Ltd., 2022 WL 1798595169, at *9-11 (granting discovery service of subpoena was proper where founders were likely the only parties with necessary information about the debtor’s assets) . . . 59 . . . This Motion seeks, in part, emergency ex parte relief. As expressly contemplated by section 1519(b) of the Bankruptcy Code, which permits the Court to grant relief “on an ex parte basis,” the The urgent need to obtain the Emergency Order without prior notice is warranted because . . . 60 . . . see also In re Iovate Health Scis. Int’l Inc., 2025 Bankr. LEXIS 2284, at *34-35 39 . . . Error in Verified Petition Para. Correction 28 . . . In re Fairfield Sentry Ltd., No. 10 Civ. 7311 (GBD), 2011 WL 4357421 (S.D.N.Y. 2011), at *10–16 7 . . . Error in Motion for Joint Administration Para. Correction 6 Bankruptcy Rule 1015(b) provides, in relevant part, that if “two or more petitions cases [are] pending in the same court . . . by or against . . . a debtor and an affiliate,” the court “may order a joint administration of the estates.” . . . Accordingly, “two or more petitions cases [are] pending” in this Court . . . . Errors in Motion for Entry of an Order Scheduling the Recognition Hearing Para. Correction 6 Section 1517(c) of the Bankruptcy Code provides that “[a] petition for recognition of a foreign proceeding shall be decided upon at the earliest possible time.” 11 U.S.C. § 1517(c). Additionally, Bankruptcy Rule 2002(q)(1) provides that “[a]fter the filing of a petition for recognition of a foreign proceeding, the court shall promptly schedule and hold a hearing on the motion.” 7 Bankruptcy Rule 2002(q)(1) further provides that: . . . the debtor, all persons or bodies authorized to administer foreign proceedings of the debtor, all entities against whom provisional relief is being sought under § 1519 of the Code, all parties to litigation pending in the United States in which the debtor is a party at the time of the filing of the petition, and such other entities as the court may direct, [shall be given] at least 21 days’ notice by mail of the hearing . . . . 26-10769-mg Doc 25 Filed 04/18/26 Entered 04/18/26 16:10:41 Main Document Pg 4 of 5
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