Based in Göppingen some 40 kilometres east of Stuttgart, Märklin said it hopes to continue operations while it undergoes restructuring.
“We hope to work with insolvency regulators to overhaul and re-establish our company with its long tradition and cult status according to German bankruptcy law,” Märklin executive Dietmar Mundil said.
The beleaguered toy train company employs 1,050 people – 650 in Germany around 400 in Hungary. Founded in 1859, the firm has belonged to British financial investor Kingsbridge Capital since 2006.
Märklin had recently been negotiating with its lenders to put off repayment of a loan that came due in January. But the banks refused to extend the reported €50 million loan, forcing the company to file for insolvency.
The news is sure to put a damper on celebrations marking Märklin's 150th anniversary this year, however, some model train fans said they were certain the company with continue to chug along.
“This saddens us,” said Frederik Braun, the owner of Minature Wonderland – the world's largest model train exhibition in Hamburg.
But he said he was confident the company could survive insolvency proceedings. “Märklin will never die,” he said. “Model trains are once again being found in toy stores. For a long time they were being hidden in the back corner.”