Rangers' second-largest shareholder said Wednesday the club faced "inevitable" liquidation as the Glasgow giants would be unable to solve their crippling financial crisis.
South Africa-based director Dave King said in a 1,200-word statement he plans to sue Rangers boss Craig Whyte after the Scottish powerhouses were forced into administration last month.
"I do not believe that there is a reasonable prospect that the company can come out of administration," said King. "I believe that liquidation is inevitable."
In a bleak assessment of the turmoil gripping Rangers, King said the "footballing institution" of the club would survive but the company would not.
Rangers would probably have to reapply for membership of the Scottish Football Association, King said, a prospect which could mean the club would have to work their way back to the top flight from the lower leagues.
"It is a sad point to have reached, but if managed sensibly, it can result in Rangers returning to its former glory as a football club in the shortest time possible," King said.
"We must all strive to ensure that an appropriate ownership structure guarantees that this event is never repeated."
Meanwhile talks aimed at preventing redundancies at Rangers were due to resume on Wednesday, a day after breaking up without result after plans to introduce wage cuts were rejected by the agents of several players.
Negotiations involving the club's administrators, players and their agents, manager Ally McCoist and Scotland's Professional Footballers' Association lasted most of the day but no agreement was reached.
The administrators said failure to settle on players' personal terms had prevented a deal being done on Tuesday, although they were optimistic of reaching an agreement when talks resumed on Wednesday.
Previously on Tuesday, Gregg Wylde and Mervan Celik became the first players to leave Rangers after administrators rejected a proposal by the squad to have wages deferred.
It is understood midfielders Wylde, 20, and Celik, 21, had their offers for voluntary redundancy with no pay-off accepted although the final details have still to be worked out.
Rangers were placed in administration last month after British tax authorities went to court to seek payment of an unpaid bill of Â£9 million ($14m) built up since owner Craig Whyte took control at Ibrox in May.
They are also awaiting the verdict of a tax tribunal that could leave Rangers with a bill of up to Â£75m, according to Whyte.
The 140-year-old club were docked 10 points for entering administration, a penalty which effectively handed the Scottish Premier League title to arch Glasgow rivals Celtic.
Administration is the process whereby a troubled company calls upon independent expert financial help in a bid to remain operational.