The AAF is officially bankrupt. 

The league, which halted operations earlier this month at the discretion of control owner Tom Dundon, announced on Tuesday that it had filed for Chapter 7 bankruptcy through the court for the Western District of Texas (San Antonio Division). As such, the potential development league for the NFL has ceased all business operations and begun the process of liquidation. 

A statement from the league reads as follows: 

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.

We thank our players, coaches and employees for their commitment to the game of football and to this venture. Our fans believed in the AAF from the beginning, and we thank them for their support. We are hopeful that our players, coaches and others will find opportunities to pursue their football dreams in the future.

A copy of the filing from Front Office Sports shows just how bad the damage is. In all, the AAF had accumulated more than $48 million in liabilities, including more than $38 million in unsecured claims. That is compared to $11.3 million in assets and just over $500,000 in cash on hand. 

Of note, the AAF also said in its statement that it "is committed to ensuring that our bankruptcy proceeds in an efficient and orderly manner. Pursuant to the bankruptcy laws, a trustee will be empowered to resolve all matters related to the AAF's remaining assets and liabilities, including ongoing matters related to player contracts." According to a source close to the AAF, players can sign with CFL teams. 

The AAF is also fighting multiple lawsuits with the potential for more down the road. Two former players have already filed a class-action case against the league, including Dundon and CEO Charlie Ebersol, claiming the players were misled and defrauded. One former AAF coach told CBSSports.com that another could be on the way representing coaches, as well.