A bankruptcy judge said the State of Oklahoma can’t use Tronox Corp.’s Chapter 11 filing as an excuse to not pay the chemical company for land it acquired as part of a highway easement.

The state’s Department of Transportation said the company’s bankruptcy should suspend a jury trial that would establish the amount of monetary compensation Tronox is entitled to for losing the land, but the company said the state is misreading bankruptcy law.

The Bankruptcy Code halts legal action against a company when it files for Chapter 11 protection, but the “automatic stay” rule doesn’t necessarily stop the company from pursuing legal action that’s to its benefit.

The Oklahoma Department of Transportation “is attempting to use the automatic stay as a sword against Tronox, when in fact the stay is a shield intended to protect Tronox,” the company said in court papers.

Judge Allan L. Gropper of the U.S. Bankruptcy Court in Manhattan sided with Tronox last week and said that a jury can make a determination about the easement compensation.

In 2007, Oklahoma used its condemnation power to acquire land Tronox owed for a highway easement. Under state law, Tronox is entitled to be paid for the land. The Oklahoma City-based company demanded a jury trial to determine the amount of that compensation.

Tronox’s January 2009 bankruptcy filing halted the condemnation process, but the company tried to enter into an agreement with the state that would have allowed the process to continue so the company could be paid for the land.

After the state refused to enter into the agreement, Tronox asked the judge to force the state to allow the process to continue, including the compensation trial.