Coventry City's board have confirmed that they have filed for the club to go into administration, incurring a ten-point penalty in the process.
The Sky Blues have been forced to take drastic action, as a takeover of the club is still some way from being completed.
A statement on the club's official website read: "The board of Coventry City Football Club can confirm that it has filed in court notices of intent to go into administration.
"This is a legal process protecting the Bank and its creditors and should speed up the potential takeover of the club and therefore take Coventry City into a solvent financial situation.
"This legal notice gives Coventry City a ten-working day window to complete the takeover talks with Ray Ranson and Sisu Capital, along with all other parties.
"Following recent speculation, the club can confirm that staff and player wages have now been paid and we look forward to a successful conclusion of the takeover in the near future."
Sky Blues manager Iain Dowie had earlier threatened to quit the Championship club if they went into administration.
Having had to work under a transfer embargo, Dowie said of recent developments: "I'd review my position in light of what I've been told.
"I'll definitely be doing that. We've preached about togetherness and I've got a fantastic amount of respect for the group of professionals we've got here."