Bankruptcy as an Escape Hatch

The high court permits troubled firms to cancel union pacts

In most dictionaries, bankruptcy is a polite word for going belly up. But the Supreme Court handed down a decision last week that will enable corporations to use bankruptcy as a way to avoid going belly up. In a 9-to-0 opinion, the court ruled that a company that has filed for bankruptcy can cancel a union contract, cut wages and lay off workers without having to prove that the pact would cause the company to go completely broke. Declared AFL-CIO Special Counsel Laurence Gold: "The ruling obviously enhances the opportunity for...