Brazilian oil firm OGX owned by tycoon Eike Batista, filed for bankruptcy Wednesday, after negotiations with creditors failed.
If its pedition is approved by court, OGX would have six months to continue operating while it tries to renegotiate its debts.
The protection will also give the company 60 days to present a debt restructuring plan that will be submitted to creditors, who in turn will have 180 days to approve or reject.
With bankruptcy protection, OGX's stocks, which slumped in the past few months and were traded at an equivalent of 7 U.S. cents per share earlier in the day, will be withdrawn from the Sao Paulo Stock Exchange.
OGX has some 3.6 billion dollars of international debt due on Thursday. The size of the debt has made OGX the biggest bankruptcy case in Latin America.
The company defaulted on a 45 million-dollar interest repayment in early October, leading to bankruptcy.
OGX's bankruptcy is the latest chapter in the spectacular story of Batista, who was the richest man in Brazil -- and the seventh richest worldwide -- in early 2012. He had often said he wanted to become the world's richest.
But his empire crumbled as his flagship company OGX failed to see expected windfalls. The company reportedly owes a total of 11.2 billion reals (5.1 billion dollars).
Batista, who made a fortune in mining and later expanded his business to other areas such as events management, logistics and restaurants, founded OGX in 2007. The company's IPO in 2008 was able to raise 6.7 billion reals (3 billion dollars).
However, the company announced last year that several of its wells were either underproducing or defunct. In early 2013, it announced that its operating wells in the Tubarao Martelo area would stop producing in 2014 and production in other areas would not begin at all.
As a result, OGX stocks lost more than 95 percent of its value in a short period of time. The OGX crisis was also affecting other companies in Batista's EBX group, such as logistics company LLX, naval company OSX and mining company MMX.
In total, Batista has lost over 30 billion dollars of his fortune in the past 18 months.
To save his empire, Batista started to downsize. He sold some of his companies, traded shares in others, and laid off employees. Even his yacht was reportedly sold for scrap.
