TOKYO, Oct 26, 2007 (AFP) - Japan's largest language school, Nova, filed for bankruptcy on Friday, four months after it was ordered to halt part of its operations for insufficient refunds to students who had cancelled contracts.

Nova 'filed for protection from creditors under the Corporate Rehabilitation Law,' said a spokesman for the Osaka District Court in western Japan, adding that the court had granted the request.

The foreign language school, which has an estimated 400,000 students, is burdened with debts amounting to some 50 billion yen (438 million dollars), Jiji Press news agency and other local media reported.

With the company protected from creditors, a court-appointed trustee would sort out debts and seek sponsors to help rebuild Nova.

Nova president Nozomu Sahashi is reportedly being sought by the Japanese authorities for questioning but cannot be found.

The trade and industry ministry slapped a six-month suspension on part of Nova's operations in June as it found refunds by the company to students who cancelled long-term contracts had been insufficient.

Nova has since been struggling to keep its students and has closed many of its branches. Many of its employees, including foreign teachers, have not been paid recently.