BANGOR (AP) – Red Shield Environmental LLC and RSE Pulp & Chemical LLC announced Saturday that the companies have filed petitions for relief under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court in Bangor.

The companies said that as part of a reorganization proceeding they reached an agreement with their lenders, Chittenden Bank and FAME, regarding continued working capital financing.

Red Shield was formed in November of 2006 for the purpose of purchasing a mill formerly owned by Georgia Pacific in Old Town. Georgia Pacific had closed the mill several months earlier, idling about 400 workers.

The state of Maine bought the mill from Georgia Pacific and Red Shield bought it from the state.

RSE Pulp was formed in April 2007 to operate the pulp mill.

Company officials said Saturday the pulp plant will remain temporarily idled, but no additional layoffs will occur as a result of the Chapter 11 filing.

Company officials said they are negotiating with a new financing source with a goal of returning the plant to full operations.

“Despite this temporary setback, we are committed to a speedy reorganization to the benefit of our employees, suppliers and customers,” Ed Paslawski, the companies’ chief executive officer, said in a statement.

“With the new revenue sources we have identified and our potential in the rayon pulp market, we continue to believe that the future will be bright for RSE Pulp and Red Shield,” Paslawski said.

Officials said RSE Pulp has been converting its pulping operation to manufacture dissolving pulp, which is sold as rayon and is used principally for clothing.

The price of wood chips, which were described as RSE Pulp’s chief raw material, has risen by $30 per ton in recent months and similar increases in fuel and chemical costs have significantly increased the cost of operations, officials said.