Senators file for bankruptcy protection

OTTAWA -- The Ottawa Senators filed for bankruptcy protection Thursday, seeking to avoid paying creditors while they look for a buyer.

The filing under Canada's federal Companies' Creditors Arrangement Act allows the first-place team to keep playing during any negotiations on a sale, owner Rod Bryden told a news conference.

He said he was working with a potential partner on a bid to buy the team and the Corel Centre where it plays.

The filing gives Bryden until Jan. 14 to submit a bid, he said. If it is rejected or he fails to do so, a broader marketing plan will seek other buyers.

Despite their financial woes, the Senators are tied with Vancouver for the most victories in the NHL this season with 25. The Senators lead the Northwest Division with 56 points, and are tied with Detroit for second place overall, behind Dallas.

The club did not pay its players on New Year's Day after a refinancing deal involving Canadian and U.S. banks fell through. That deal would have injected $42 million to cover operating expenses -- including the missed salaries -- and payments to keep its loans current.

Bryden said the filing provides $8.8 million in emergency funding from creditors to "preserve the value of the product" for its eventual sale. The money would allow the team to pay players, perhaps as soon as today, along with other expenses for the next 30 days, he said.

Much of the Senators' financial problem is caused by the weakness of the Canadian dollar, worth about 65 cents in U.S. currency. Like other Canadian teams, the Senators take in revenue in Canadian dollars but pay salaries in U.S. dollars. The team also has struggled for years with heavy debt.