Japan’s largest chain of foreign language schools, Nova Corp, has filed for court protection from creditors.
The firm, which mainly offers English classes, has more than 800 schools and 400,000 students across Japan.
But in June, it was ordered to suspend part of its operations, after a court ruled it had misled customers in advertisements about some services.
Since then, student enrolment has fallen sharply and Nova has accumulated debts of up to JPY50bn ($437m, £213m).
Its 2,000 Japanese staff have not been paid since July and some 4,000 non-Japanese instructors have not been paid their salary for October, union officials said.
Nova has now closed all its schools, Kyodo news agency said.
A court-appointed trustee will sort out its debts and seek sponsors to rebuild its business, Japanese media reports said.
Nova is one of Japan’s major employers of foreign nationals. Murdered Briton Lindsay Anne Hawker was working for Nova at the time of her death.