Thursday's announcement came just over a week after FleetBoston Financial Corporation and the Canadian Imperial Bank of Commerce backed out of a complex $234 million deal that would have erased much of the Senators' considerable tax debt.
The plan included $42 million to cover operating expenses, including players' salaries. The team missed a payroll payment last week with players receiving a note from owner Rod Bryden saying they would be paid in the "next couple of days."
The Senators owe $160 million to creditors and $210 million to the Corel Centre, where the team plays its home games. Part of the court-ordered protection includes marketing the team for sale. The target date for the sale of the club is early May.
Until then, the Senators are hoping that $8.8 million in emergency funding from creditors will help the team pay its players.
"We have been working with the club and the interested parties to finalize the club's short-term financing arrangements and consider today's filing a necessary and constructive step in that process," NHL Commissioner Gary Bettman said.
"Now we can focus on the club's long-term needs."
Bryden will have the opportunity to bid on the club and creditors have until Jan. 24 to accept any offers.
"This franchise is recognized as one of the best managed in the league and that management will continue to do everything possible to deliver quality hockey to fans and maintain maximum value of the franchise throughout this process," Bryden said. "Our players have demonstrated their commitment to this franchise by outstanding play and a high level of community involvement.
"Players have been particularly supportive during the past 10 days, when the unexpected failure of the transaction scheduled to close prior to year end left the club without cash to pay their salaries. This quality and commitment from management and players assures our community and creditors of maximum value."
The NHL issued a statement vowing, "to work with the club and the interested parties to finalize the club's financing arrangements."
The league already has ownership issues in Buffalo. The Sabres could be facing bankruptcy if prospective owner Mark Hamister cannot complete his purchase by Friday.
This is the fourth bankruptcy in NHL history. The Pittsburgh Penguins filed in 1974 and 1998 and the Los Angeles Kings declared bankruptcy to facilitate the sale of the team in 1995.
So far, Ottawa's financial woes have not filtered down to the ice. The Senators lead the Eastern Conference with 56 points and have just five losses in their last 29 games (20-4-4-1).
"The people of Ottawa, Eastern Ontario and Western Quebec have invested a decade of support to build one of the best franchises in the NHL," Bryden said. "The future has already begun with the second half of the season and our team the best in the league.
"Ottawa has dreamed of a Stanley Cup since that first win against Montreal in 1992. We now have a real contender for that prize. After the sale process is concluded, it will have a small fraction of the financial burden it has carried through this decade. The next decade for this franchise will be hugely successful, built on the efforts of the first decade here in Ottawa."
The Senators have the sixth-lowest payroll in the league at $30.3 million.
NHL Players Association Executive Director Bob Goodenow issued a statement calling the bankruptcy filing "expected."
"It is indeed unfortunate that both the club and the arena have been undercapitalized since their inception," he said. "Over the past few years, the club has been successful on the ice and the Ottawa fans and business community have done their best to support the team. However, the excessive debt load, when combined with the weak Canadian dollar, have dictated this outcome."