The consideration of ethical and legal issues in the business world is mandatory in recent times. This is on the concept of increased competition in the business arena as well as increased awareness of the consumer on quality and execution of ethics. In this phenomenon, it’s necessary for any business entity to ensure adherence to the set business and legal laws. This will not only establish favorable environment for business but also a good image for the business entity. Many businesses are usually involved in various situations which are perceived to be illegal or unethical. Just like any other entity, the business should be responsible for its actions. Precisely, the bankruptcy case of the General Motors in 2009 is very interesting. In this regard, this paper will analyze and profoundly discuss the legal and ethical issue involved in the General Motors’s bankruptcy case and giving personal opinion on the decision on the case (Cross 234).