Based on Wednesday's filings to a Texas court, the league has about $48.4 million in liabilities—including about $9.6 million owed to creditors—but only about $11.4 million in assets.
The league will file a Chapter 7 bankruptcy, which is the most common form in the United States, per Rothstein, giving it an opportunity to sell assets to pay creditors.
The AAF provided a statement after the latest filing:
"We are deeply disappointed to be taking this action. The AAF was created to be a dynamic, developmental professional football league powered by an unprecedented alliance between players, fans and the game. The AAF strove to create new opportunities for talented players, coaches, executives and officials while providing an exciting experience for fans. We are proud of the fact that our teams and players delivered on that goal."
Unfortunately, the league had financial trouble and was forced to turn to Carolina Hurricanes owner Tom Dundon in February to make a $250 million investment.
One of the problems was the inability to find an agreement with the NFLPA to allow practice squad players to compete in the AAF.
Meanwhile, it appears money was another significant issue.