LISBON – Knight-Celotex, the world’s largest fiberboard manufacturer with a plant in Lisbon Falls, has filed for Chapter 11 protection under the U.S. Bankruptcy Code.

The action was necessary, the company said, because its accounts were frozen by Bank of America last week. Throughout 2008, the company voluntarily took steps to ensure the viability of its operations. During that time the company maintained a positive cash flow and paid all principal and interest on time, the company said. Despite these efforts, last week Bank of America made the decision not to renew the company’s credit facilities and froze the company’s accounts, according to the statement.

“We believe that filing for Chapter 11 protection provides us with the best opportunity to protect our employees and our operations, while fulfilling our obligations to our customers, vendors and the communities in which we operate,” said James Knight, chief executive officer of Knight-Celotex.

Headquartered in Northfield, Ill., Knight-Celotex is the only U.S. fiberboard manufacturer that both manufactures and ships products within the United States. It also has operations in Sunbury, Pa., and Danville, Va.