He said: "I knew, like everyone else, that cash has been tight at Selhurst Park but I could not believe the news that we'd been forced into administration.
"The timing just astonishes me. There's still a week to go in the transfer window and we are about to sell Victor Moses for millions. I'm devastated, shocked and hugely disappointed."
Administration triggers an automatic 10-point penalty, meaning Warnock - who had guided Palace to two points from the play-offs - is now facing a relegation battle.
He continued: "I feel for Simon Jordan, our owner, who's been working harder than anyone can imagine to keep the club going and secure its' future. I know he's as devastated as I am.
"The players are also in shock. We had a meeting and explained as much as we could do them.
"I don't know what the future holds for me or the players. In all my years in the game I've not been at a club which has gone into administration before so I don't know where everyone stands.
"I'm hoping to speak to the administrators but it may have to wait until we're back in London.
"I'm obviously disappointed from a playing perspective as we'd been doing so well - we've only lost twice in our last 15 games and I really felt we'd a chance of making the play-offs.
"Now, suddenly, we find ourselves in a relegation battle. The players don't deserve that, or the fans, or the chairman."
Warnock hopes the squad does not get sold off cheaply, although he expects plenty of interest in his players - with striker Moses the main attraction.
He added in The Independent: "I know there will be clubs eyeing up all the talent we have coming through from our youth scheme and thinking they can get players for a song.
"Let's hope that doesn't happen. As I said, I really cannot understand the timing."
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