Portsmouth was on the verge of going out of business Friday after failing to reach an agreement with creditors over the sale of the club to prospective buyer Balram Chainrai.
The League Championship club, which was relegated from the Premier League last season after falling into financial problems, said it has not managed to exit administration - a form of bankruptcy - and could be liquidated because it cannot continue trading.
Former owner Alexandre Gaydamak was accused by Portsmouth of ''moving the goalposts'' of the sale, with the club claiming the new owners had fulfilled all the requirements of the Football League and the creditors.
''Put simply, despite being offered full payment for the secured part of his debt ... Mr. Gaydamak has demanded a very significant up-front cash payment in order to allow the deal to proceed by releasing his security,'' the statement read.
''It is neither in the interests of the club nor its unsecured creditors for such a ransom payment to be made, particularly where the payment is being demanded by one of the authors of the club's current circumstances.''
Portsmouth said Gaydamak ''has shown complete disregard for the supporters, the club and the city of Portsmouth.''
In April, Portsmouth owed a combined total of 38.2 million pounds ($60 million) to previous owners and had a total debt of 119 million pounds ($186 million).
Portsmouth, which finished bottom of the Premier League last season, is currently 15th in England's second tier.
