USL League One is terminating its franchise agreement with Windsor-based professional soccer franchise Northern Colorado Hailstorm, the league announced Thursday.

The move comes after a developer of Future Legends Sports Complex, where the Hailstorm play, filed for Chapter 11 bankruptcy last month.

"This decision reflects our commitment to uphold the standards of our organization and protect the interests of our clubs’ ownership," the United Soccer League said in a statement.

The team is owned by Jeff Katofsky and son, Casey, along with former Rockies player Ryan Spilborghs, per the Hailstorm's website. Jeff Katofsky was listed in the bankruptcy filing as a managing member of Future Legends 5 LLC and is a co-founder of the complex. The property is split among multiple LLCs bearing the name "Future Legends" in part or all of their titles.

The Hailstorm recently finished its third season in USL League One, going 12-5-5 and making the playoffs.

"We are very disappointed that USL has made the unfortunate unilateral surprise decision to part ways despite our many efforts," the Hailstorm said in a statement.

"We are actively exploring exciting opportunities for the 2025 season and beyond. The Hailstorm will be playing at Future Legends Complex next year. We are not folding and have no intention of ceasing operations."

According to BizWest, the league had to loan Katofsky over $1 million to pay Hailstorm player salaries during the 2024 season.

Earlier this week, Katofsky (via a Future Legends LLC) filed a lawsuit against the league in California state court, claiming fraud, concealment and diversion from the leagues’ owners and franchisees.

In the suit, Katofsky alleges that USL League One did not pay the $100,000 prize money for winning the Jägermeister Cup — an in-season, intra-league tournament — among other issues.

The franchise termination is the latest in a series of setbacks for the partially-built massive sports complex that broke ground five years ago in Windsor.

On Sept. 3, a Weld District court judge placed portions of Future Legends Sports Complex under receivership.

According to previous Coloradoan reporting, the order removed Katofsky and his ownership team from operations of portions of the 100-acre sports complex and appointed Cordes & Company of Denver as the receiver.

Coloradoan reporter Miles Blumhardt contributed to this story.

Chris Abshire covers high school and community sports for the Coloradoan.