Continuing with the monthly series, here are short summaries of December 2023’s Subchapter V bankruptcy opinions from across the country. As in the prior Sub V case posts, I’ll provide a roadmap of the issues and then you can click the opinions if you want to dig deeper.

However, there’s a “fun” catch this month. Recently, Stone & Baxter upgraded from Lexis+ to Lexis+ AI. Given that I’m inundated almost daily with emails about artificial intelligence and law practice, I couldn’t help but feel behind the times. Thus, I’m excited to have something to experiment with. And that’s exactly what I’m going to do with this post.

Specifically, I located on Lexis all of the Subchapter V opinions from December; I had my assistant find the docketed versions of those opinions using the Lexis-sourced citations; except for Filitech (as noted below), I uploaded .pdfs of those opinions to Lexis using its AI “summarize” feature; and now I’m going to ask the AI to summarize each case. But because this is an experiment first and foremost, I’m literally going to use the AI case summary, without any editing from me (other than formatting).

[I added the extra step of locating the opinion .pdfs from Pacer, instead of giving Lexis its own citation, so as to test how the AI does summarizing any old .pdf. It has a citation-driven “summarize case” feature, too, but I think I like the “summarize document” feature better.]

Disclaimer: Because I know you’d never take my word for it on a case summary, I also know you won’t take the AI’s word for it. Indeed, all I’m showing in this experimental post is an example of what legal-oriented, relatively cost-effective AI is capable of producing in just a few minutes for 83 pages of dense cases, without any editorial or supervisory varnish.

Here goes:

1. In re McBride (Bankr. D. Maine Dec. 5, 2023)

I asked Lexis AI to provide a 150 word summary in a formal style:

In In re McBride, the bankruptcy court denied confirmation of the debtor’s proposed Chapter 11 plan. The court found that the debtor, who was an individual dentist, failed to provide sufficient personal income information as required by 11 U.S.C. § 1191(c)(2)(B) to allow the court and creditors to determine her disposable income.

Specifically, the income projections submitted were inaccurate and confusing, and the attached exhibits reflected the income and expenses of the debtor’s dental practice rather than her personal income. As this was an individual rather than corporate bankruptcy case, the debtor’s personal income was the relevant metric. Additionally, the court held that the proposed plan did not provide appropriate remedies in accordance with 11 U.S.C. § 1191(c)(3).

Therefore, as the debtor did not satisfy the disposable income and appropriate remedies requirements for plan confirmation under Chapter 11, the court denied confirmation of the plan.

Dave’s Feedback: If you read the case, you’ll appreciate how the AI (give only a word count) provides exactly what I’m looking for: a “roadmap of the issues.” Given a larger word count, it might’ve revealed just how far down in the weeds Judge Cary got on: (i) the disposable income requirement and related budgeting and presentation issues and (ii) the “appropriate remedies” requirement (which I now think deserves more attention than I’ve been giving it).

In short: this opinion is essential reading if you’re starved for guidance on those issues.

2. In re Carter (Bankr. N.D. Ga. Dec. 13, 2023)

I asked Lexis AI to provide a 150 word summary in a casual style but then told it to summarize it using bullets and to make it less irreverent (after it initially called the debtor “this dude” (!) and described the outcome as a “bummer”—sorry Judge Sigler Judge Cavender). 03/18/24 UPDATE: I learned the hard way, and in the worst way, this afternoon that I wrongly attributed this opinion to Judge Sigler.

  • The court addressed whether debtor John Fitzgerald Carter was eligible for Subchapter V bankruptcy
  • Carter owned two companies in Chapter 7 bankruptcy – D&N Electric and Carter Brothers Security Services
  • Together, Carter and the companies exceeded $7.5 million in debt, making Carter ineligible for Subchapter V
  • Carter argued the companies weren’t “affiliates” because trustees controlled them
  • The court rejected this, finding trustees don’t change the definition of “affiliate”
  • The court also found Carter didn’t prove combined debt was under $7.5 million
  • Therefore, the court ruled in favor of the U.S. Trustee’s objection
  • Carter is ineligible for Subchapter V and must proceed through standard Chapter 11

Dave’s Feedback: Again, if you want to get down into the weeds—this time on Judge Sigler’s Cavender’s (see above correction) thorough, precise, but also sympathetic analysis—then read the case. And when you do, you’ll continue to appreciate how well the AI can condense a lengthy opinion.

3. In re Feilitech US, LLC (Bankr. N.D. Miss. Dec. 21, 2023)

I asked Lexis AI to provide a 150 word summary of an MS Word version of the Lexis opinion (without headnotes) because the Pacer version, at 52 pages, was too large for the “summarize” feature.

In re Feilitech US LLC involved interim fee applications filed by Jones Walker LLP and Cozen O’Connor as bankruptcy counsel for the debtor Feilitech. The US Trustee objected to the hourly rates requested. The court found it had preapproved the firms’ hourly rates under § 328 when approving their employment. Thus, the rates could only be reduced if improvident due to unanticipated circumstances. The court found no justification to lower the rates under 328. It also found the hours billed were reasonable and necessary under § 330. The court awarded the fees requested after first applying remaining balances of prepetition retainers.

Dave’s Feedback: I could have justified not including this opinion as a Sub V opinion because it’s really just a § 328 and § 330 opinion. But, the larger issue, that I wish the AI would have picked-up on, is the issue of whether a Sub V case can accommodate large, out of town firms billing at large firm rates. And I also wanted to highlight the incredible efforts of Judge Maddox, one of my favorite judges, in giving the issue 52 pages of attention. Could you summarize a 52-page legal opinion in 150 words in less than 30 seconds?

Conclusion

If my partners are reading, then our decision to upgrade to Lexis+ AI was a brilliant decision and we’ll never regret the extra $XXX.XX per month we’re paying. [Admit it, you’re curious what it costs!] If they aren’t reading, then it’s going to take some additional tinkering before I’m ready to fully recommend the AI add-on. While I’m uncomfortable turning these sort-of-monthly case summary posts over to the AI, the AI did a good, if not an excellent job and, other than a few extra seconds that’s baked into any Lexis/Westlaw transaction, it’s really fast and, as this small sample size experiment shows, pretty discerning and competent.

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