The Wasps provided the notice after HMRC threatened with a liquidation petition on Wednesday, with the club still owing £35m to bondholders after they invested to help buy the Coventry Building Society Arena seven years ago.
Experts believe the Wasps have 10 business days from giving notice to appointing officials, which gives the club limited time to find a new investment and puts the Wasps at risk of being sued by creditors after the 10-day period.
John Cullen, business recovery partner at accounting firm Menzies LLP, told Telegraph Sport: “The Notice of Intent to Appoint Administrators is a strong business statement and is issued when the company is technically insolvent: which means management is in the cards. From the point of issue, The company now has 10 business days to designate those responsible, as it will look to save all or parts of the business or get the best possible return for its creditors.
“This ten-day period gives the owners a chance to breathe, however, if no action is taken and officials are not called in time, this ‘security cover’ will be lifted, and the business is at risk of being sued by its creditors. Wasps, this discussion has been going on for quite some time – they will hope for a miracle if they want to remain a viable company and retain their place in the league.”