The Croatian owner of Norwegian shipbuilder Kleven Verft has filed for the yard's bankruptcy after its banks pulled out of a financing deal last month.
DIV Group had warned a filing was likely if the Ulsteinvik shipyard's bank accounts remained frozen.
TradeWinds sister newspaper Dagens Naeringsliv (DN) reported that a petition was filed to open bankruptcy proceedings at Sunnmore district court on Friday.
Salaries owned to some workers will be a priority during the process, the report said.
A supply ship will be completed and work on extending a fishing vessel will continue, unions said.
A new hope?
"We both believe and hope that we can complete the two projects. And then we hope that we will get new owners to invest further," DN cited union representative and board member Olav Hoydalsvik as saying.
Norwegian media has said it is hoped new Norwegian owners will step in.
DIV Group said it had experienced several obstacles during the integration of Kleven with its Croatian operations, including the Brodosplit yard.
DN cited DIV owner Tomislav Debeljak as saying the loan agreement was terminated when he took over as new CEO on 22 June.
Norway's Bankruptcy Act allows for all or part of a bankrupt business to be salvaged by a new or existing entity and form the basis of a viable business.
The succeeding entity can acquire all or part of the business from the bankruptcy estate and potentially from its mortgagees and pledgees.
Compatriot shipbuilder Havyard has been going through a similar process and spun off its shipbuilding operations into a new company.
Three banks pulled out
Three Norwegian banks had terminated their finance agreements as chief executive Kjetill Bollestad left the company.
A spokesman for DIV has blamed the lenders' actions on "untrue accusations of the company's solvency".
Now, DIV spokesman Johan Wilskow told Norwegian media last week that work was ongoing to find solutions that would avoid bankruptcy for the yard.
"But it is clear that unless the banks change their decision to reopen Kleven Verft's accounts, there is no alternative but to petition for bankruptcy," he said.
One of the banks involved has been named as SpareBank 1 SMN.
Pay lagging?
Other reports said 240 workers had not received salary and holiday pay.
DIV has not responded to TradeWinds' request for comment, while Kleven itself is not commenting.
Ex-chief executive Bollestad told the Nett newspaper: "I do not want to and cannot be part of the operation and culture that Debeljak is part of."
Norwegian shipowner Hurtigruten teamed up with banks to provide NOK 900m ($93m) in new capital for Kleven in 2017 to secure completion of two expedition cruiseship newbuildings there.
The company then took ownership of the yard, before selling it to DIV in January this year after taking delivery of the second of these.
Kleven, which has 400 employees, had been reeling from major financial losses in January, accumulating NOK 1.2bn in debt in the last four years, TradeWinds reported.
Bollestad said at the time that the company's future was looking brighter than it had in many years.
