This case is suitable for students just learning the principles of finance, but also suitable for use in courses to students and experienced managers. The challenges facing the automotive industry and the unique involvement of GM makes the case rich discussion on how best to restructure the company. In January 2008, Delphi Corporation (Delphi) was in Chapter 11 bankruptcy for more than two years, but was on the verge of approving a plan of reorganization (POR), which would allow it to emerge from bankruptcy with a significantly improved balance. Like most such plans, POR Delphi encouraged to reduce the leverage of the company through an exchange of debt unsecured creditors for a mixture of new debt and new equity. The decline in interest expense was projected to return to profitability and make the Delphi restructuring of viable foreseeable future. Students take the position of the various pretenders to explain why the applicant or the class will not be voting for the plan. The case presented the legal framework Chapter 7 liquidation and Chapter 11 reorganization, which play a key role in understanding the economic incentives of the different plaintiffs. "Hide
by Kenneth Eades, Gaurav Gupta Source: Darden School of Business 17 pages. Publication Date: March 31, 2010. Prod. #: UV5601-PDF-ENG
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