TXCO Resources and its subsidiaries have filed voluntary petitions for relief under chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Western District of Texas.

The filing was precipitated by a series of events that led to a contraction in TXCO’s liquidity, impairing its ability to operate its business. The Company has continued to experience substantial difficulties in meeting short-term cash needs, particularly in relation to vendor commitments. Extreme volatility in energy prices and a deteriorating global economy have created difficulties in the capital markets and have hindered TXCO’s ability to raise debt and/or equity capital. Faced with these constraints, and after extensive efforts to improve the Company’s liquidity, TXCO and its subsidiaries filed their chapter 11 petitions.

The Company has filed a variety of first day motions with the Court that, with Court approval, will allow it to continue to conduct business without interruption. These motions are primarily designed to obtain post bankruptcy financing and minimize the impact on the Company’s operations, customers and employees. During the reorganization process, suppliers should expect to be paid for post-petition purchases of goods and services in the ordinary course of business.

Tags: TXCO Resources Inc.