Essay: Business law-bankruptcy of Delphi Corp

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Essay: Business law-bankruptcy of Delphi Corp

Sample Essay

Delphi Corp filed for chapter 11 of the bankruptcy code mainly because they could foretell the dismal effects which could emerge if the company was liquidated. However in their actions, they put GM in the same situation as it was now facing the same predicament due to Delphi Corp’s request for the bankruptcy court to void contract agreements. The voiding of the collective agreement between Delphi Corp and UAW meant that they would have severed any cordial relationships which had existed prior to the filing for bankruptcy.

Collective agreements play a crucial role in marking the termination of negotiations between worker’s unions and employers. As Castagnera and Cihon (2008, p.534) asserts these agreements bind involved parties to uphold the agreement and accept reprimand when there are breaches of contract. Chapter 11 only protects companies filing for bankruptcy when they have met particular conditions and are thus warranted to void the collective agreement.

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