Three paradoxes feature in this episode:

Paradox 1: You must disclose a bankruptcy stay to the Court of Appeal. What about a bankruptcy that does not create a stay?

Answer: Yes, the disclose-bk-stay rule also means disclose a bk non-stay.

Paradox 2: Deadbeat dad owes $500k. He settles and agrees to pay $250k. How much does he owe?

Answer: Still $500k.

Paradox 3: District court 1 rules AI work product is protected because, among other things, no court has ruled otherwise.

District court 2 then rules otherwise.

Key points:

• Local rules mean what they say: The First District's Local Rule 21 requires "prompt" notice of any bankruptcy that could cause a stay—not just bankruptcies you've confirmed do trigger one. Counsel must explain whether the stay applies, not decide unilaterally that it doesn't and stay silent.
• No stay for debtor-initiated lawsuits: The automatic bankruptcy stay under 11 U.S.C. § 362(a)(1) does not apply to actions brought by the debtor itself. Debtors need to marshal assets through litigation; they don't need protection from their own lawsuits.
• Counsel pled ignorance of Local Rule 21 and reliance on "faulty advice" from bankruptcy counsel—neither excuse worked.
• Courts view violations of notice requirements as a waste of limited judicial time, particularly when discovery occurs days before oral argument.
• Even without sanctions, the published admonishment serves as a lasting professional rebuke.
• The broader ethical duty: appellate lawyers must notify courts of any occurrence that could cause the court to lose or question its jurisdiction.