Pescanova, based in Galicia in northwestern Spain, declared bankruptcy after a meeting of more than 13 hours with its creditors, which include banks such as Sabadell, Caixabank, Bankia, Santander, BBVA and Banco Popular, reports China.org.
The company, whose shares had been suspended from trading since 12 March, said it filed for insolvency in order to "protect the interests of people affected."
Last month Pescanova was reported to have found differences between the liabilities required by its creditors and those calculated by the company, and was accused by some advisers for not being "transparent" in its management.
The stock market regulator opened an investigation into Pescanova for possible market abuse, but Pescanova failed to provide the complete information about its accounts which banks and advisers are requiring.
The Bank of Spain said the company has a total debt of €2.5 billion, but the debt could be even higher as doubts still remain over the exact state of the company's accounts.
According to the Spanish National Institute of Statistics, firms declaring bankruptcy increased by 32 per cent from 2011 to 2012 with a total of 7,799 enterprises declaring insolvent last year.