Nortel (NYSE: NT), which employs some 2,000 people at its campus in RTP, Wednesday.

Earlier,  said such a filing was expected.

Nortel filed for Chapter 11 protection in Delaware bankruptcy court.

Toronto-based Nortel is reeling from the sudden drop in demand for its voice-only telecom-network equipment and has been trying to cut costs and sell assets.

Citing unnamed sources, the Toronto newspaper had said appears to be on its way to a break-up and could be “sold to foreign rivals.”

The news comes as Nortel, which faces a $107 million payment on debt on Thursday, continues to struggle financially. The Canadian company, the largest maker of telecommunications gear in North America, has failed to find a buyer for one of its networking divisions, a key factor in its bid to recover financial stability.

Creditor protection would give the company more opportunities to explore restructuring options or sell off some of its assets.

Nortel  said in a release that it had been in the process of a turnaround since late 2005 but added that "the global financial crisis and recession have compounded Nortel’s financial challenges and directly impacted its ability to complete this transformation."

The company said it is taking this action now with a $2.4 billion Canadian ($2 billion) cash position.

"Nortel must be put on a sound financial footing once and for all," Nortel President and Chief Executive Mike Zafirovski said in the statement.

The company has been attempting to recover for years from an accounting crisis that affected results and caused shareholder lawsuits, regulatory investigations and the firing of key executives, including CEO Frank Dunn.

Nortel stock, which once traded at more than $1,200 Canadian a share on a pre-split basis during the tech bubble, closed Tuesday at 38.5 Canadian cents a share on Canada’s main stock exchange.

Nortel once had more 95,000 employees and a market capitalization of $366 billion Canadian ($297 billion) on the Toronto Stock Exchange. It closed Tuesday worth just 191 million Canadian ($155 million).

The Toronto Stock Exchange has halted trading of Nortel’s shares. Nortel stock fell 30 percent in pre-market trading.

Nortel’s board met Tuesday night to discuss strategy and the debt payment. Rumors had circulated for weeks that Nortel might seek bankruptcy protection.

"It is an iconic Canadian name, and there will be a great national grieving over this," said one person familiar with Nortel’s plans, according to the Globe and Mail.

Nortel shares lost more than 24 percent of their value Tuesday, closing at under 40 cents.

One analyst told Reuters that Nortel could pursue bankruptcy even though as of September, the company reported some $2.3 billion in cash and cash equivalents.

"The issue is not whether or not they can pay it. … It’s the idea of: if you know you’re eventually going to default anyway, why not do it now and keep the … interest payments you would have shelled out," Duncan Stewart of DSAM Consulting told Reuters.