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The American Football Alliance, which suspended its operations earlier this month in the middle of its first season, filed a bankruptcy petition in a Texas court on Wednesday.
On the basis of the deposit of assets and liabilities, the league – under the limited liability company Legendary Field Exhibitions LLC – had assets of $ 11,372,298.68 and a liability of $ 48,366,188.90.
These liabilities include receivables of $ 9,642,171 due to creditors.
"We are deeply disappointed to take this step," AAF said in a statement Wednesday. "AAF was created to be a dynamic and evolving professional football league, driven by an unprecedented alliance between players, supporters and the game. AAF has strived to create new opportunities for talented players, coaches, leaders and officials, while providing passionate fans with an exciting experience We are proud that our teams and players have achieved this goal. "
The AAF said that a director would be set up to resolve all issues related to assets and liabilities, "including ongoing issues relating to player contracts".
The league, despite millions of dollars invested in this bank, has $ 536,160.68 in the bank and only $ 78,582 in licenses, deductibles and royalties. The money was held in three accounts: $ 500,000 in a collateral money market account, $ 36,116.72 in an LLC operating account and $ 43.96 in an account bearing the name Birmingham Iron.
The debts include $ 7 million owed to MGM Resorts International for "intellectual property security".
The league and many of the companies to be formed with it, including players AAF, AAF Properties and the group Ebersol Sports Media, are currently filing bankruptcy petitions under Chapter 7.
"We thank our players, our coaches and our employees for their commitment to football and this business," AAF said in its statement. "Our fans have believed in the AAF from the beginning and we thank them for their support.We hope that our players, our coaches and others will find opportunities to pursue their football dreams at the same time. to come up."
Chapter 7 is the most common form of bankruptcy. This means that the league will collect and sell its assets to pay creditors in accordance with the US Bankruptcy Code. Property such as real estate – although it is not clear whether the FAA had one – may be exempt, but all other assets may be liquidated.
This includes equipment purchased by the league that was returned to a San Antonio warehouse earlier this month, according to a league source.
"AAF is determined to ensure that our bankruptcy unfolds in an efficient and orderly manner," the league said in a statement.
The AAF has struggled financially throughout its existence, eventually requiring a $ 250 million pledge from Carolina Hurricanes owner Tom Dundon – the league gets a lot less – before the second week of games to keep the league afloat.
Dundon decided to close the league two months later, on April 2, which resulted in three class actions.
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