Higashinihon-Ferry Co. and four of its affiliates filed for court protection from creditors with the Tokyo District Court on Sunday.
According to private credit research agency Teikoku Databank, their total liabilities stand at about 90.7 billion yen.
Higashinihon-Ferry, a Sapporo-based ferry operator connecting Hokkaido and the main island of Honshu, alone had liabilities estimated at 58 billion yen, the agency said.
It will continue ferry services on all seven routes, including one between Oarai, Ibaraki Prefecture, and Tomakomai in southern Hokkaido, company sources said.
As a result of intense competition with industry rivals, the company experienced a fall in transport volume that led to a decline in sales of almost 10 billion yen per year compared with figures recorded at the height of its business, the sources said.
The money Higashinihon-Ferry borrowed for excessive capital investment in its affiliates also began to threaten the company's financial health, they said.
The firm had a negative net worth of 8.5 billion yen as of the end of fiscal 2002.
The ferry operator tried to streamline operations, including measures to reduce services and sell assets, but gave up voluntary rehabilitation after those efforts failed to reduce losses, the sources said.
Established in 1965, the company started out with a service connecting Hakodate in southwestern Hokkaido with the town of Oma in Aomori Prefecture and expanded to seven routes, becoming the biggest ferry operator in Hokkaido with about 600 employees.