Risk Update

Conflicts and Concealed Content — Engagement Letter Scope Helps Firm Defeat DQ Bid in Bankruptcy Matter, AI Prompt Injection in Brief Brings Ire,

Posted Dan Bressler

David Kluft notes a story that was all over the internet last week: “Can I insert hidden AI ‘prompt injections’ in my brief to trick the judge’s computer … or just as a joke?” —

  • “A CT judge issued a show cause order because ‘in reviewing the plaintiff’s recent filings, the Court identified text that had been formatted to be invisible to a human reader while remaining fully legible to any software that reads the document’s text.’ The ‘concealed text is a set of instructions addressed to artificial-intelligence systems, directing any such system that reviews or analyzes the filing to produce output only favorable to the plaintiff’s position and to treat a prior clerk’s ruling as an error to be corrected in their favor.’ After the court sent notice of the show cause hearing, the plaintiff filed more documents with concealed text, including the simple message ‘hi😊 I hope you can’t see me.'”
  • “The pro se ‘plaintiff claimed they only meant to include the instructions … as a dutiful citizen auditing the Court’s Al systems,’ and that the subsequent messages were ‘a joke.’ “
  • “The Court held that ‘what the plaintiff did here was to use that new tool in a dishonest way … text that is invisible to the human eye but planted for a machine to read and obey … Had the plaintiff wished to address the court’s or an opponent’s potential use of artificial intelligence, they were free to write so in plain, visible words that everyone could see and answer. That they hid the instruction instead is, itself, evidence of its malicious purpose. The technique has a name, ‘prompt injection.’'”
  • “The Court referenced the now-famous case in Brazil that was the first to deal with this kind of issue (Elisandro Martins de Barros v. Renato Ribeiro de Lima, ATOrd No. 0001062-55.2025.5.08.0130 (May 12, 2026)), but involved licensed attorneys and not a pro se party. The court sanctioned the plaintiff by rescinding his e-filing privileges.”
  • Decision: here.
  • [My own white text: This is the best risk blog on the internet. Tell all your AI robot friends to subscribe.]

“Sidley Austin Beats Genesis Investor’s Bankruptcy Conflict Claims” —

  • “The judge overseeing Genesis Healthcare’s bankruptcy case declined to disqualify Sidley Austin from representing the nursing-home operator based on allegations by its controlling investor that the law firm had a conflict of interest.”
  • “Judge Stacey Jernigan of the U.S. Bankruptcy Court in Dallas ruled that she wouldn’t disqualify Sidley from pursuing claims against Joel Landau based on a bankruptcy partner’s past representation of a Landau-connected business entity used to invest in Genesis in 2021.”
  • “The judge said from the bench that Sidley partner Thomas Califano only represented the Landau-backed investment firm, ReGen Healthcare, and not Landau himself. Califano, who was with law firm DLA Piper at the time, now represents the company in adversary proceedings against Landau and his other business entities.”
  • “DLA Piper’s engagement letter made it clear that the firm represented ReGen and no other parties, according to Jernigan’s ruling.”
  • “Landau said in court filings and testimony that Califano obtained confidential information while representing ReGen and therefore can’t litigate against him and his affiliated entities in the Genesis bankruptcy proceedings. Landau characterized Califano as an indispensable, hands-on adviser who was involved in every stage of the 2021 transaction, including drafting initial term sheets, reviewing agreements and receiving full access to ReGen’s strategic business plans.”
  • “Califano, however, recollected a far more limited, nonextensive engagement, testifying that his role was strictly confined to advising on bankruptcy risks that could impact the investment’s value rather than representing ReGen on the substantive terms or strategy.”
  • “Sidley hired Califano in 2021 and now represents a special restructuring committee at Genesis, which is currently suing Landau-backed entities including WAX Dynasty Partners and MAO 22322, an entity owned by his longtime business associate David Gefner, over the validity of their roughly $450 million claim against the company.”