ANALYSIS: AI May Steer Feasibility Into Murky Waters

It won’t be much longer before artificial intelligence takes on a major role in financial projections in Chapter 11 feasibility litigation.

And as restructuring advisors increasingly use algorithmic tools to generate or stress-test financial projections, feasibility litigation will begin to confront the issues that federal courts are already grappling with in other AI contexts.

A recent federal district court decision held that a criminal defendant’s AI chats aren’t privileged. While that dispute arose in the discovery context, the underlying message—that courts are going to scrutinize AI-infused evidence to determine whether and how AI affected that evidence—applies more broadly.

Bankruptcy counsel ...