Nelson Mullins attorneys Shane Ramsey and Mackenzie Keffalos authored a practice note published in LexisNexis Practical Guidance, “Bankruptcy and Generative AI.” In the article, they provide a comprehensive roadmap for navigating the intersection of generative AI and bankruptcy law. They emphasize that while AI introduces valuable efficiencies, it also brings complex legal, ethical, and operational challenges. In one section, they explore how AI is intensifying—not replacing—the core principles of bankruptcy law, including transparency, fiduciary responsibility, and equitable treatment of creditors.

Artificial intelligence is no longer a distant curiosity; it is already reshaping the practice of bankruptcy law. From the ownership and transfer of AI-generated assets, to the treatment of executory contracts under Section 365, to the marketing and sale of AI platforms under Section 363, the Bankruptcy Code is being stress-tested in ways Congress never envisioned. Courts are likewise adapting the rules of evidence and discovery—proposing new Rule 707, tightening authentication under Rule 901, and enforcing the reasonable inquiry duties of Rule 26(g)—all in response to the opportunities and risks presented by AI.

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