The bankruptcy filing was made in the federal district court of New Jersey, where LIV Golf set up a subsidiary earlier in the summer.

Chapter 11 protection postpones a US company’s obligations to its creditors, giving it time to reorganise its debts or sell parts of the business.

PIF is providing a bankruptcy loan of $49.6m (£36.6m) – called ‘debtor in possession’ (DIP) financing – to help fund the process.

When announcing its decision to withdraw funding, PIF said the “substantial investment required by LIV Golf over a longer term” was “no longer consistent” with its strategy.

Despite its decision to stop bankrolling LIV Golf, PIF added it “remains committed” to its “substantial current and future investments in various sports as a priority sector”.

On Tuesday, LIV confirmed international investment firm BC Partners as its proposed new investor in a letter to fans outlining its “next phase”.

“LIV Golf has entered a court-supervised restructuring process that provides us with the time and framework to address previous financial obligations and complete a transaction that will make the league’s next phase a reality,” said the letter.

“Put simply, this process is designed to build a stronger and more sustainable future for LIV Golf.”

O’Neil added in a statement: “This process gives us the structure and time to pursue a landmark transaction and begin the next chapter of LIV Golf – one built around the fans, an innovative, player-first ownership model, and a part of the global golf ecosystem.”

In yet another indication the free-spending days of LIV 1.0 are over, the letter said the new league would be “built around a sustainable business model”.

Players are set to be given equity and individual commercial rights are set to be returned to players, giving them greater earning potential. In terms of prize money, LIV Golf purses are set to be lower than events on the PGA Tour – which has risen in part because of the existence of LIV – but higher than events on the DP World Tour.

The letter also outlined proposed changes, with field sizes expanding to 75 players, the introduction of a cut, creating qualifiers and having more teams that “embrace national identities”, with the ambitions for teams to “grow into enduring global sports businesses”.