Japanese car parts maker Takata has filed for bankruptcy protection in the US and Japan.
The company is facing billions of dollars in liabilities for its defective airbags, which have been linked to at least 17 deaths worldwide.
Some of the airbags contained faulty inflators which expanded with too much force, spraying metal shrapnel.
More than 100 million airbags have since been recalled, the biggest safety recall in automotive history.
In January, Takata agreed to pay $1bn (£784m) in penalties in the US for concealing dangerous defects, and pleaded guilty to a single criminal charge.
The firm paid a $25m fine, $125m to people injured by the airbags as well as $850m to carmakers that used them.
But it is facing further legal action in the US and liabilities of 1 trillion yen ($9bn).
Filing for chapter 11 bankruptcy protection in the US – with similar action taken in Japan – will allow for an expected takeover by US-based Chinese company Key Safety Systems.
Trading in Takata shares – which dived last week on anticipation of the bankruptcy move – has been suspended in on the Tokyo Stock Exchange.