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Originally Posted by KenWittlief
Chapter 11 means the company owes money that it cannot repay: suppliers and creditors.
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That's not entirely correct. Chapter
7 is all about being unable to pay one's debts. Chapter 11 is basically about getting some breathing room in order to negotiate ways to satisfy all creditors without selling everything and shutting down operations.
It seems that Delphi's main problem has been an inability to manage the operating costs that were inherited in the split from General Motors. This isn't from a lack of trying; many of the costs have been beyond the company's control. The Chapter 11 filing provides a chance to force a solution to some of the previously unresolvable issues.