Chapter 11 of the US Bankruptcy Code gives a company time to reorganize.

Management has run of the company, while it is protected from creditors’ lawsuits. The bankruptcy court approves all major business decisions.

The bankruptcy filing does not include Panda, the ethanol distiller said.

Panda said the Hereford unit sought bankruptcy protection after French bank Societe Generale, which had been acting as the administrator of a lending syndicate, told management that a participant in the group would close the tap on further lending. Panda descried that lending refusal as a breach in the bank’s financial commitment.

“Repeated conversations with the syndicate and an unsuccessful attempt to secure debtor-in-possession financing” failed to yield a financing solution for the ethanol refinery, Panda said. “The Hereford subsidiary's management concluded that the only prudent option available was to put the facility up for sale,” added the Dallas-based company, which is developing ethanol plants in Kansas and Colorado.