The company that the Football League class as being Coventry is expected to be liquidated after their CVA proposal was rejected.
A statement from the club reads: "It is with great regret that a proposed CVA has been rejected by ACL. It means CCFC Ltd is likely to be put into liquidation which is expected to result in a points penalty for the club going into the new season.
"The football club and the Alan Higgs Centre Trust accepted the administrator's CVA, but the City Council, through ACL, have chosen to reject it, leading to possible liquidation and the risk of a 15-point deduction.
"The club will hold urgent meetings with the Football League this afternoon to go through the next steps for the football club."
The Administrator, appointed by the club's owners SISU, has rejected all bids except the one made by SISU-owed company Otium. Fans had predicted that the CVA would be rejected after an offer from stadium owners ACL to substantially reduce rent payments at the Ricoh Arena failed to include terms to sell the stadium to SISU - who are widely believed to be trying to force the stadium company into bankruptcy to get the ground on the cheap.
Coventry are still expected to start the season tomorrow, but are likely to incur a 15 point penalty for liquidation and may also face further sanction.