A court has declared bankrupt the dairy at the center of China's deadly tainted milk scandal, one of the firm's owners said _ a development lawyers said adds to concerns about how and when those sickened by the doctored products will be compensated. A court in Shijiazhuang has issued a bankruptcy order against Sanlu Group Co. in response to a petition from a creditor, New Zealand's Fonterra Group said Wednesday. Fonterra owns 43 percent of Sanlu. The official Xinhua News Agency said the court in Hebei province accepted the filing. Xinhua, citing a spokesman for the company, also said Sanlu confirmed its bankruptcy. Phones rang unanswered at the company and the court on Wednesday. Sanlu, like a number of major Chinese dairies, had long been exempt from government inspections because it was deemed to have superior quality controls _ until high levels of the industrial chemical melamine were found in its baby formula and other products earlier this year. Several more dairies were also found to have doctored their goods in a scandal that was blamed for killing six babies and sickening 294,000 children. Thousands of parents _ angered by what they say was the government's breech of their trust _ have been demanding compensation for their sickened and dead children. At least a dozen individual lawsuits have been filed against Sanlu, but they are caught in a legal limbo because courts have neither accepted nor refused the cases _ a sign of the scandal's political sensitivity. A lawyer representing dozens of families with children sickened by tainted milk said that the bankruptcy order raised concerns that his clients might be outmaneuvered by the dairy's creditors. In theory, those who were physically harmed should get compensation first,'' Beijing-based lawyer Xu Zhiyong said in a telephone interview. But our concern right now is that they might act in a brazen way, namely that the creditor bank or banks will collude with the local government to make Sanlu's assets go to compensating themselves first.'' According to Chinese bankruptcy law, a company's liquidated assets are distributed first to employees who are owed salaries or insurance payments, then to pay off taxes, and finally to common creditors.'' Another lawyer, Li Fangping, said that since the government has not yet specified the amount that victims should receive, families of sickened children must seek legal orders to be declared creditors'' eligible for pay-outs. Unless the government issues a regulation for compensation, the families have to go to court to ask for compensation,'' Li said. The Health Ministry has yet to announce a compensation plan but said earlier this month that officials were finalizing details and that the dairy companies involved would be expected to contribute.