Rap music mogul Marion "Suge" Knight has staved off receivership by seeking bankruptcy protection for himself and his music label, Death Row Records.
Marion 'Suge' Knight has missed a number of court hearings
The record producer had been ordered to pay more than $100m (£57m) to a former associate who said she had helped start the record label in 1989.
Lawyers for Mr Knight said he did not have the money to pay the judgment, and was forced to seek federal protection.
The label helped launch the careers of rappers such as Snoop Doggy Dogg.
In March 2005, Mr Knight was ordered to pay former associate Lydia Harris $107m after she claimed she helped co-found the label in 1989.
Her former husband, Michael Harris, an imprisoned drug dealer, later claimed he put up $1.5m (£863,200) to help start the record label and argued he was entitled to take half of the $107m as a result.
In August 2005, Mr Knight's assets were frozen and all of the parties involved have been fighting in court ever since.
Mr Knight failed to appear on Saturday for a court hearing and that, in turn, led to legal action which would have placed his company in receivership - something he and the company could avoid, in accordance with US law, by filing for bankruptcy.
The BBC's Emilio San Pedro in Miami says the bankruptcy motion was filed hours before a hearing at which the company might have been placed in receivership.
Mr Knight's lawyer, Laurence Strick, said his client would continue to operate the company while the bankruptcy matter goes forward in federal court.
Mr Strick said Mr Knight was attempting to reorganise his financial affairs and that his client remained "optimistic" and "focused".