Oct. 12 (Bloomberg) -- The Chicago Cubs filed for bankruptcy as part of a plan by owner Tribune Co. to sell the baseball team to the family of TD Ameritrade Holding Corp.’s founder, Joe Ricketts.

Chicago National League Ball Club LLC listed assets and debts of more than $1 billion today in documents in U.S. Bankruptcy Court in Wilmington, Delaware. The transfer has been approved by Major League Baseball’s other owners.

“Having Major League Baseball sign off on a sale will certainly take care of a major obstacle for the Cubs,” bankruptcy attorney Tom Salerno said today in an interview. Salerno is overseeing the bankruptcy of the Phoenix Coyotes, whose proposed sale fall apart because of a dispute between the team’s owner and the National Hockey League.

Under a process approved last month by U.S. Bankruptcy Judge Kevin Carey, Tribune will transfer the Cubs to a new entity controlled by the Ricketts family. Tribune, the bankrupt newspaper and TV company, is to keep a 5 percent stake in the team.

The deal, worth about $845 million, would bring Tribune creditors $740 million, according to court records.

The top creditors of the Cubs include JPMorgan Chase Bank NA as agent for lenders, owed $8.6 billion, and Major League Baseball, which was listed as the third-biggest creditor.

Creditor Rankings

The court papers said the debt to Major League Baseball was undetermined and placed it between the second-biggest creditor, Merrill Lynch Capital Corp., agent for lenders owed $1.6 billion, and the fourth-biggest, Chicago Cubs Charity, owed $1.165 billion.

At least two former Cubs had claims against either Tribune or the team: right-handed relief pitcher Luis Vizcaino and former shortstop Shawon Dunston.

The Cubs said the team owed Vizcaino about $500,000, court papers show. He was taken off the team’s roster in April and later signed with Cleveland Indians. Dunston filed an objection to the Cubs’ sale, claiming the team owed him a promised college scholarship from his time as a player. Dunston later withdrew the objection.

Because the transaction is a so-called leveraged partnership, Tribune can avoid paying about $300 million in taxes, according to tax consultant Robert Willens, who teaches a class on tax law at the business school at Columbia University.

Should Carey grant final court approval for the deal, Tribune will take cash out of the partnership, which is funded by debt. The structure allows Tribune to avoid taxes it would pay as part of a traditional sale, Willens said.

December Filing

Tribune filed for bankruptcy court protection in December, about a year after billionaire real-estate developer Sam Zell led the $8.3 billion purchase of the company. Tribune’s properties include the Los Angeles Times and the namesake Chicago newspaper.

The Cubs board of managers approved the team’s bankruptcy, saying it “is desirable and in the best interest of the company,” according to the Chapter 11 petition.

The Cubs have drawn more than 3 million spectators to their 95-year-old stadium in each of the past six seasons. Those fans fill Wrigley Field, on the city’s North Side, to root for a team that hasn’t won a World Series since 1908, the longest drought in baseball. The team finished 83-78 this season, second place in the National League Central division behind St. Louis.

The Cubs haven’t reached the World Series since 1945, when the team lost to the Detroit Tigers in seven games after tavern owner William Sianis cursed the franchise because his pet goat was ejected from a game.

The case is In re Tribune Co., 08-13141, U.S. Bankruptcy Court, District of Delaware (Wilmington).

To contact the reporter on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net.

Last Updated: October 12, 2009 17:03 EDT