Law keeps firms going, bars creditors

Chapter 11 of the U.S. Bankruptcy Code will allow Texaco tocontinue to operate while protecting it against Pennzoil Co. and anyother creditors.

Under Chapter 11, a company obtains a federal court order thatfrees it from the threat of creditors' lawsuits until it can developa reorganization plan to put its finances in order.

Without that protection, the creditors might call their loansimmediately due and, if the company could not pay them, the creditorscould seek a court order that the company be liquidated and itsassets …