Hearts are to go into administration, it is understood.
The financially-stricken Scottish Premier League club are in the process of lodging papers at the Court of Session in Edinburgh and have approached accountancy firm KPMG to act as their administrators.
The club was faced with a winding-up order last week after Her Majesty's Revenue and Customs threatened action over an unpaid £100,000 tax bill, although the majority of that sum has been paid.
Hearts were also hit with an immediate transfer embargo by the Scottish Premier League last Friday after admitting they could not afford to pay their players.
The news came just 24 hours after the Gorgie board released a statement saying they had entered a “critical” stage in their battle to pay off debts of £25m as well as financing tax and running costs.
The entire Jambos squad was put up for sale in a desperate bid to raise the reported £500,000 needed to see the club through to the start of the new season.
The situation at the two Lithuanian companies which hold large stakes in the club has also raised fears for the future of the Edinburgh club.
Majority shareholder UBIG – which owns a 50% stake in the club – and 29.9% shareholder Ukio Bankas were both once controlled by Vladimir Romanov but are now in the midst of being declared insolvent by Kaunas-based authorities.
Ukio Bankas – which lost an appeal against liquidation last Wednesday – is due £15m by Hearts, who also owe another £10m to UBIG.
Politician Ian Murray is leading the Foundation of Hearts supporters’ group who hope to buy the club, with a formal bid expected to be lodged by the end of the month.
There is also interest from a number of other parties, including a Scandinavian consortium.