(CNN) -- Six-time World Series winners and one of Major League Baseball's (MLB) most successful franchises, the Los Angeles Dodgers, filed for bankruptcy in an American court on Monday
The move comes after the MLB -- who took charge of the team in April to ensure they "will be guided appropriately in the future" -- rejected a television rights deal last week which would have provided them with a much-needed financial boost.
MLB commissioner Bud Selig turned down the proposed $3 billion agreement with the FOX network, citing it was not in the "best interest of the fans, the teams or the game."
The bankrupty application is the latest chapter in a long-running story of financial difficulties for the Dodgers, a saga that has had the divorce battle between team co-owners Frank and Jamie McCourt as a back drop.
The MLB appointed representatives to take care of the day-to-day running of the Dodgers in April due to the ongoing fall out between the owners and with the team suffering a drop in attendances at its Dodger Stadium.
"The Dodgers have been one of the most prestigious franchises in all of sports, and we owe it to their legion of loyal fans to ensure that this club is being operated properly," Selig said.
Frank McCourt, who purchased a controlling stake in the team in 2004, has agreed in principle a $150m loan with hedge fund J.P. Morgan Chase to meet running costs.
A judge will hold a hearing on Tuesday to decide whether or not to approve the loan, with $40m of the money set to be used to fulfil the Dodgers' payroll commitments, and McCourt will also request permission to hold an auction for the broadcasting rights.
"The commissioner's office has spent the better part of one year working with Mr. McCourt and his representatives on the financial situation of the Los Angeles Dodgers," read a statement from Selig on the Dodgers' official web site.
"[The financial problem] was caused by Mr. McCourt's excessive debt and his diversion of club assets for his own personal needs. Any potential solution to his problems that contemplates mortgaging the future of the Dodgers franchise to the long-term detriment of the club, its fans and the game of baseball would not be acceptable."
The west coast outfit are currently fourth in the National League West, and enjoyed a season-best 15-0 victory against the Minnesota Twins at Target Field on Monday.